Bank Misr Liban is exploring prospects to acquire a bank in a bid to increase its balance sheet, its Executive General Manager Fadi Daouk said.
“We are looking to increase our role in the Lebanese market and this is why we currently welcome any plan for acquisition,” he told The Daily Star in an exclusive interview.
Daouk said that Bank Misr Liban has already completed serious reforms across the institution’s various departments which make it ready to expand in the local market by acquiring another bank. “All our departments are functioning in a very successful way and we can start thinking of acquiring a new bank,” he said.
He explained that his first priority when deciding on an acquisition plan is to look at the profile of the new bank’s owners, in addition to its figures and branches, and their locations. “We should make sure that the new bank’s branches are complementary to the branches that our bank has in a bid to ensure a proper geographic dispersion,” he said.
Daouk said that the reforms completed by the bank over the past few years include a reshuffling of all premises, the IT department and staff since 2007. “Also, we hired a new head of risk management and a new head of branch management which contributed to an improvement of our overall performance in 2015,” he said. “I can say that we have an excellent team today which makes us ready to grow further this year,” he added.
Bank Misr Liban saw an increase in its profits in 2015 by 35 percent from $5.214 million in 2014 to $7.026 million in 2015. “The percentage is high because our profits are still small but acceptable,” he said.
Daouk said that the bank’s profits are acceptable but they could have been better if it wasn’t for the anti-government protests that took place in 2015 which impacted the flow of expats’ deposits to all Lebanese banks at that time.
However, despite the complicated security situation, Daouk said his bank was capable of increasing its total deposits by 12 percent from $1.140 billion in 2014 to $1.272 billion in 2015. Moreover, the bank saw an increase in assets by 13 percent from $1.347 billion in 2014 to $1.518 billion. As for loans, they went up by 17 percent from $254.941 million in 2014 to $297.819 million in 2015.
Daouk said that the bank adopts a conservative strategy to avoid a high default rate on loans. “This is why our loans to deposits ratio stands at 23 percent compared to 35 percent for other banks,” he said.
Bank Misr Liban is keen on increasing its presence in the local market not only by looking for acquisition opportunities but also by making sure to be time efficient in providing services to its clients. “For instance, if a client wants to take a loan from a big bank the application has to go through several committees which may take around one month for approval,” he said.
“But approval on loans at our bank takes only 10 days because our committees are here and they meet on a regular basis,” he added.
Daouk said that bureaucratic procedures in big banks are complicated and require a huge amount of time.
He added that one great advantage offered by Bank Misr Liban is the strong backup from Bank Misr in Egypt which is a major shareholder at 92 percent. “The rest of the shareholders are Lebanese,” he said.
He added that Bank Misr Liban also has an excellent board of directors. “We can rely heavily on them and on their networks,” he said.
Daouk said that among the measures taken by the bank to improve its penetration in the Lebanese market are the unique products it offers, which include, for instance, the possibility of opening a gold account by depositing only 1 ounce.
“Other banks require depositing 50 ounces in order to be able to open a gold account,” he said. “We only ask for 1 ounce to encourage Lebanese employees to make savings, which enables us to create a niche where other banks are not working,” he explained.
Daouk said that the bank is also planning on launching two new products in February. One of them has to do with providing loans to individuals allowing them to purchase machines for solar power generation at a very minimal interest rate of 1 percent. “The machine is purchased for $3,000 and the client pays $120 per month to take 5 amperes,” he said.
“The client will pay the amount over two or three years to be able to benefit from the machine over a 10-year period with a guarantee for 10 years as well,” he added.
The second product, Daouk said, allows loans to be given for green buildings at a low interest rate.
Bank Misr Liban currently has 18 operating branches covering all Lebanon. “We are also planning on opening two new branches this year,” he said. “We will also reactivate our branches in areas such as Hammana by creating products that are suitable to serve these communities,” he added.
By Dana Halawi
