|BOB reports 4.2 percent profit rise - The Daily Star
|Bank of Beirut (BOB), one of Lebanon's top banks, said Monday that net profits increased by 4.2 percent last year over 2001, with its assets posting even greater growth due its merger with Beirut Riyad Bank.
BOB, which is one of six banks listed on the Beirut stock exchange, said its net profits at end of December 2002 reached LL30.3 billion ($20.2 million), compared with LL29.1 billion for 2001. BOB's total assets in 2002 increased by 58 percent to LL5.13 trillion, from LL3.239 in 2001.
Total deposits increased by 37 percent to LL3.39 trillion at the end of 2002, from LL2.47 trillion at the end of 2001.
BOB, which is 10 percent owned by Emirates Bank International, bought the medium-sized Beirut Riyad Bank in an all-share deal last year. Officials at BOB had said the merger with bank will help them tap customers in Saudi Arabia and Africa in a bid to expand its operations. The merger has allowed BOB to become the sixth largest bank in Lebanon, according to BOB officials.
The Central Bank facilitated the merger by extending soft loans to BOB to cover of Beirut Riyad Bank's non-performing loans.
Most Lebanese banks are expected to post lower earnings for 2002, due to the lingering economic slow down and lack of appetite for government paper, a major source of income for the local banks.
Bank profits are not expected to increase in 2003 due to the banks' agreement to subscribe to zero-interest Treasury bills worth some $4 billion to help the government reduce its debt-servicing costs.
The government, which spends 80 to 100 percent of its revenues on debt-servicing, secured the agreement with the banks after securing $4.4 billion in soft loans from donors last year. The soft loans, pledged at the "Paris II" donors conference, will be mostly drawn to replace high-interest government debt with cheaper paper.
The government has so far secured $950 million of the Paris cash and it expects the rest of the money to come through soon.
The Daily Star