22 February 2011
BEIRUT: Bank of Beirut has acquired 85 percent of the Australian Laiki Bank as part of its expansion, the bank announced Monday.
Informed sources, speaking on condition of anonymity, told The Daily Star that the acquisition is worth more than $420 million, including plans to invest in the acquired bank in Australia.
“This is one of the most important acquisitions in Lebanon in many years. This shows Lebanese banks are still eyeing other markets outside Lebanon to expand their business,” the source said.
In a joint statement from Marfin Popular Bank, the Cypriot parent company of Laiki Bank, and Bank of Beirut, the two institutions confirmed the agreement for the acquisition of 85 percent of the shares of Laiki Bank (Australia) Ltd. by Bank of Beirut.
The transaction has been approved by the relevant regulatory authorities in Australia, Cyprus and Lebanon.
The statement said that this cross-border transaction reflects the deliberate strategy of Bank of Beirut s.a.l. to expand in selected markets with strong Lebanese diaspora.
As a result of this acquisition, Bank of Beirut will have a total network of 65 branches, of which 50 are in Lebanon and 10 in Australia through its APRA-regulated subsidiary Laiki Bank (Australia) Ltd. The bank also has two branches in the United Kingdom and Germany through its FSA-regulated subsidiary Bank of Beirut (U.K.) Ltd., one branch in Cyprus, and two in the Sultanate of Oman. The consolidated balance sheet will be around $9 billion and $6.88 billion in deposits.
After the transaction, the equity capital of Laiki Bank will double, propelling the bank into a stronger position in the Australian banking sector.
Commenting on the transaction Salim Sfeir, chairman and general manager of Bank of Beirut said: “Entering the Australian banking sector is a direct materialization of our strategy to expand outside Lebanon and serve our customers wherever they are. After highly successful operations whether in the U.K., Germany, Cyprus, Oman and other overseas markets, the acquisition of a majority ownership in Laiki Bank (Australia) Ltd. will allow us to further improve our performance and offer our customers an expanded international platform that caters for all their needs.
Bank of Beirut declared consolidated unaudited net profits of $100.7 million in 2010, constituting an increase of 35.3 percent from 2009. Total assets reached $8 billion at the end of 2010, up 14.8 percent from end-2009; with loans rising by 33.5 percent year-on-year to $2.25 billion. Deposits totaled $5.83 billion at the end of 2010 and grew by 22.4 percent from a year earlier.
Bank of Beirut’s C shares have closed at $18.50 per share on Feb. 7. The bank has other types of shares on the Beirut Stock Exchange.
Lebanese banks are already operating in over 10 countries in the Middle East in an attempt to diversify revenues and profits and reduce dependence on the small Lebanese market. – The Daily Star
Copyright The Daily Star 2011.
