Bank AudiBank Audi

The report pinpoints that Bank AudiBank Audi has consolidated its universal banking profile starting in the late nineties, thus decreasing its reliance on traditional retail and commercial banking and increasing the contribution of non-interest income to operating income. Currently, the Bank covers a large spectrum of banking services ranging from retail, commercial, investment and private banking to capital markets and insurance activities. On the international expansion front, the report noted that Bank AudiBank Audi expanded its activities towards Europe in the late 1970s by establishing entities in Switzerland and in France. More recently, the Bank started building up a strong regional franchise encompassing Jordan, Syria, Egypt, Saudi Arabia, Sudan, UAE and Qatar. In a three-year period Bank AudiBank Audi has been able to develop a regional franchise outside Lebanon of 185,000 accounts and 132,000 clients out of 71 operating branches, generating total assets of USD 3.3 bn.

Going forward, Bank AudiBank Audi's strategic orientations, on the domestic level, revolve around consolidating its commercial banking franchise and corporate business relationships, further strengthening the retail banking coverage and developing private banking towards asset management. On the international level, Bank AudiBank Audi is targeting a balanced breakdown of earnings and assets between Lebanon and abroad of 50%/50% by 2012. In this framework, the Bank aims at penetrating new regional markets with high potential, consolidating its presence in Europe and strengthening its existing coverage of the Diaspora in West Africa, Australia and Latin America.

The report stated that despite the global financial crisis that surged during the last quarter of 2008, Bank AudiBank Audi has demonstrated a robust performance last year as witnessed by a y-o-y growth of 17.9% in assets, 21% in customer deposits and 19% in earnings while maintaining an adequate capitalization and liquidity level in that same year. With regard to H1 09 results, loans and advances grew by 3.4% during the first half of the year, while total deposits expanded by 11.6% over the same period. Net profit of USD 132.9 mn was declared for the first half of the year, indicating a 1.9% y-o-y increase in the bottom line result.

The analysis performed is based on sustained growth rates as witnessed by a CAGR standing at a respective 12.7% and 12.4% for customer deposits and loans over the projection period. According to the report, this solid growth is expected to be triggered by a rise in the contribution of newly established regional entities to consolidated activity as well as by a steadier economic environment on the domestic scene.

Assuming a strong growth in the Bank's balance sheet, a tighter cost control policy and higher interest spreads as downward pressures on Libor ease; Bank AudiBank Audi's bottom line figure is expected to witness a substantial growth as reflected by a CAGR of 15.9% over the forecast period and reach USD 497 mn in 2013e. This solid growth in earnings will directly impact the return ratios as highlighted by the ROAA moving from 1.24% in 2008 to 1.38% in 2013e and the ROEE gradually increasing from 12.9% in 2008 to 16.8% by the end of 2013e.

Despite this overall sustained growth in both balance sheet and bottom line figures, Bank AudiBank Audi's financial situation is expected to remain sound as Bank AudiBank Audi is expected to maintain its ample levels of liquidity and sound level of capitalization throughout the forecast period. The report emphasized that, in the context of a rapid surge in the Bank's loan portfolio, the risk of asset quality deterioration will be mitigated by Bank AudiBank Audi's current superior asset quality and strict management policy in this regard.

-Ends-

Should you need any clarification or request an interview, please contact Mr. Marwan Salem (Head of Research & Advisory) by phone (01-985195) or by email (m.salem@ffaprivatebank.com)

The report is also available on the website www.ffaprivatebank.com

© Press Release 2009

 

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