Liban - 2010 - Byblos Bank

Supporting a Lebanese bank’s international development strategy

 

Project start-up: 2010
Financing: $30M equity investment
Partner : Byblos Invest Holding
 
Context
 
 
Lebanon ’s banking sector has always been sound - despite the political ups and downs the country has been through for more than thirty years now – and is supported by an extremely high and constantly rising level of deposits in dollars (360% of GDP). The bulk of these deposits come from Lebanon’s diaspora and Gulf countries.
These resources greatly exceed the country’s financing needs and have given Lebanese banks regional ambitions. They are consequently developing activities in countries in the region that lack banking facilities (such as Syria, Iraq, etc.) and are thus playing a key role in the development of these economies.
However, Lebanese banks require equity and long-term resources for their international development. These resources continue to be difficult and costly to raise due to the country’s rating.
 
Project objective
 
This project aims to shore up the capital of Byblos Bank so that it can:
·       pursue its international development strategy in both the Mashreq region and Africa (for example, in DRC);
·       attract more private international investors;
·       expand Byblos Group activities for SME / SMI financing.
This project is also in line with France’s aim to scale up its presence in the Mediterranean.
 
Project description
 
This project comprises a $30M equity investment in the capital of Byblos Bank, alongside the International Finance Corporation (IFC). Both financial institutions will consequently hold roughly 10% of Byblos Bank’s capital.
In practical terms, under the partnership PROPARCO will sit on the Board of Directors of Byblos Bank and Semaan Bassil – Chairman and General Manager of Byblos Bank - will be a member of the FISEM steering committee (an investment facility to support the economic development of the Mediterranean managed by AFD and PROPARCO).
 
Impacts
 
The partnership between AFD Group and Byblos dates back to 2002 (first line of credit financed by PROPARCO and earmarked for SME financing). Thanks to this equity investment in Byblos Bank, PROPARCO will:
-     play a catalytic role in mobilizing the equity Byblos Bank requires to raise funds from private international players;
 
-     help develop local banking sectors in the Mashreq region;
 
-     build a partnership that will allow AFD Group to operate alongside Byblos Bank in other countries;
-     provide technical and material assistance so that Byblos Bank can implement its development strategy in Sub-Saharan Africa.