Lebanon’s Bank Audi open to sale of Egyptian unit in new strategy

Bank Audi is also proceeding with an equity increase which the central bank has instructed all Lebanese banks to implement to help weather the crisis. (Reuters)
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Updated 14 January 2020

Lebanon’s Bank Audi open to sale of Egyptian unit in new strategy

  • Bank Audi is also proceeding with an equity increase which the central bank has instructed all Lebanese banks
  • Bank Audi Egypt has grown from a three-branch operation acquired by Bank Audi in 2005 to 50 branches today

BEIRUT: Lebanon’s Bank Audi is considering selling its Egyptian subsidiary after receiving interest from lenders, its chief financial officer told Reuters, indicating a possible strategy rethink as Lebanon grapples with a financial crisis.
Bank Audi is also proceeding with an equity increase which the central bank has instructed all Lebanese banks to implement to help weather the crisis, the country’s worst in decades.
Finance chief Tamer Ghazaleh said Bank Audi will call a shareholder meeting for the second week of February to vote on the equity raising and he was confident of securing shareholder support.
Bank Audi is “doing the equity increase and independently considering discussing with parties selling Bank Audi Egypt at the right price,” he said in an interview late on Monday.
“For us, we would not have considered thinking of it if the situation was different in Lebanon. We have our own ambition and expansion plan in Egypt,” he said, referring to a potential sale of Bank Audi Egypt.
Since Lebanon’s crisis began, the bank has received several calls from investment bankers “trying to support us if we want to sell foreign assets as a way of increasing the capitalization and liquidity of the Lebanese operation,” Ghazaleh said.
“The appetite of investors was higher for Egypt. We did not reach any agreement with any party to do a transaction but we are considering this — if we get the right offer,” he said.
Bank Audi Egypt has grown from a three-branch operation acquired by Bank Audi in 2005 to 50 branches today with total assets of $4.4 billion at the end of September, Ghazaleh said, calling it “a very profitable operation.”
“For us, we would not have considered thinking of it if the situation was different in Lebanon. We have our own ambition and expansion plan in Egypt,” he said.
If Bank Audi decided to sell, it would still require board and regulatory approval, he said.
Lebanon’s biggest bank by total assets has expanded in the region since 2005 and has operations in 10 countries in the Middle East and North Africa, including its fully owned subsidiary Bank Audi Egypt.
Lebanon’s central bank instructed banks in November to raise their Common Equity Tier 1 capital, a key measure of financial strength, by 10% through cash injections by the end of the year and a further 10% by June 30 this year.
Bank Audi had enough shareholder support to secure approval for the equity increase, Ghazaleh said. “We are comfortable with the level of commitment of the large shareholders for this increase. We have enough support to call for the (shareholder meeting) soon,” he said.
Across Lebanon’s banking sector, a 20% equity increase should raise $4 billion, representing 2% of the banking system.
Lebanon’s central bank governor Riad Salameh said in a televised interview last week that most banks had informed the central bank that they had started steps to implement the increase.
Bank Audi had told the central bank it would need some additional weeks beyond the Dec. 31 deadline to complete the first part of the increase due to its complexity and the short time frame, Ghazaleh said, noting its listing on two stock exchanges and over 1,500 shareholders.
Bank Audi aims to raise $311 million in the first part of the increase.
“The first point is to regain the confidence of the market. The shareholders want to show to the market and customers their willingness to support their organization by any necessary means. It is to show commitment,” he said.
“The second point is that any capitalization will always be beneficial to maintaining the solvency of the banking system.”


At Davos, innovative products point to a sustainable future

Updated 24 January 2020

At Davos, innovative products point to a sustainable future

  • A single tree that to bear 40 different types of apple

DAVOS: The World Economic Forum is not all about the fourth industrial revolution or the rise of AI.

You can also find all manner of strange and intriguing products on display from biodegradable plastic made from algae to wallpaper made from recycled corn husks.

One stand titled “How do you design a tree?” is part of a conservation effort where a single tree is designed to bear 40 different types of apple.

Another stand displays colored seaweed on a rack, showing how clothes can be dyed in a sustainable, non-chemically corrosive manner.

Propped along a large wall is Fernando Laposse’s wallpaper made of variations of purple corn husks that are reinforced with recycled cardboard and cork to create wallpaper and furniture. The husks come from corn that needs very little water and can be grown in the desert, which makes it all the more sustainable.

“This initiative helps the local economy as it brings in jobs and a resurgence of crafts and food traditions while also ensuring sustainability,” Laposse said.

Another display shows a machine that extracts pellets from a mixture of algae and starch and is used to create a thread that is the base of 3D printing. These sustainable, biodegradable plastics made from algae are being experimented with in different regions.

With the rise of deep fakes — a branch of synthetic media in which a person in an existing image or video is replaced with someone else’s likeness — another stand delivers a warning on the looming dangers of unregulated software.

The Davos forum prides itself on its sustainability, and key topics have included climate, mobility, energy and the circular economy. Everything is recyclable, and participants must download an application in order to keep up with the program and any changes — a move to cut down on paper waste.