Fransabank takes plunge into Syria, plays down effect of US pressure

28 February 2008

BEIRUT: Fransabank on Wednesday became the fifth Lebanese bank to enter Syria, which is endeavoring to break US attempts to isolate the country politically and economically. The announcement came during a press conference in Damascus attended by the chairman of Fransabank, Adnan Kassar, and key government officials and bankers from Syria.

"We hope to start fully operating in Syria in June or July of this year and our goal is to set up branches in all major cities in the country in the coming few years," Kassar told The Daily Star.

Fransabank-Syria, which will have a capital of $36 million, will provide all types of retail banking services.

Kassar said 48 percent of the bank would be controlled by Frasabank Lebanon, 1 percent by his brother Adel and the rest would be owned by Syrian partners. He added that the bank had already sold 15 percent of the original 51 percent of shares originally earmarked for Syrian nationals.

"The rest of the 36 percent of the shares will be sold in the Syrian market," Kassar said.

BLOM, Audi, Byblos Bank and BEMO have established footholds in the Syrian market in recent years.

Kassar said that he was not too concerned by talk of US pressure on Syria.

"We have entered Syria because we saw a good opportunity in this market," he said.

Reuters said that sanctions imposed by the United States on Syria in 2004 have undermined Damascus' efforts to attract investment, although billions of dollars of Gulf capital have entered the country in the past few years.

"Entering Syria is part of our general expansion policy and we will continue to open new markets if the need arises," Kassar added.

He also predicted that the presence of Lebanese, and other foreign banks in Syria would increase competition and eventually improve banking services in this country.

A senior manager at Fransabank told The Daily Star that it was never too late to enter the Syrian market.

"All the Lebanese banks that opened earlier in Syria reported good profits and growth and that was very encouraging news for Fransabank," the senior manager said.|

Last year, Fransabank increased its market share in Lebanon after acquiring BLC bank for $153 million.

Fransabank acquired 97.52 percent of the shares of BLC, one of the oldest banks in Lebanon, along with 40 branches (five of which are non-operational).

BLC was Fransabank's fifth acquisition over the past few years after it previously acquired Banque Tohme, Universal Bank, United Bank of Saudia and Lebanon and Banque de la Bekaa.

The bank is already operating in France, Algeria, and Sudan and there are plans to expand to Libya, Turkey and Iraq in the future. - With agencies