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French Version

BLOM denies takeover rumors, vows to stay in for long haul

'We explicitly do not encourage or favor such offers'

The vice chairman and general manager of Lebanon's largest bank on Wednesday strongly denied rumors that it is about to be taken over by foreign investors.

Talking to reporters during a luncheon held in honor of the media, Saad Azhari of BLOM admitted that the bank had receive offers but stressed that the bank's policy of not to sell has not changed.

"We have denied before ... that BLOM's board of directors has not empowered anyone to negotiate such offers which we explicitly do not encourage or favor," Azhari said.

He added that it was only natural for a bank like BLOM to receive offers from investors because "this is the best and largest bank in Lebanon."

The rumors of a possible takeover fueled demand for BLOM's GDRs and C shares last week, with prices jumping more than 9 percent in one day.

The Azhari family controls less than 18 percent of the total shares of BLOM but it has leverage on the remaining leading shareholders. The Bank of New York controls nearly 35 percent of BLOM but has no voting power because owners of GDRs are not entitled to vote.

A source, who spoke on condition of anonymity, told The Daily Star that BLOM received an offer of more than $150 for a share, or twice market value.

"There were reports that BLOM received an offer of more than $3.5 billion for the entire shares of the bank. But it seems that most of the leading shareholders brushed off this offer," the source said.

Azhari declined to name the investors who approached the bank but one banker said that Cairo-based EFG Herms had made a serious bid.

BLOM said that the bank's profits in the first nine months of 2007 jumped by 11.44 percent to $147.591 million.

Total assets rose by 21.15 percent to $15.942 billion while customer deposits surged by 20.33 percent to $13.281 billion in the first nine months of this year.

"With these results, our bank maintained its lead in Lebanon in terms of profits, assets and deposits," Azhari boasted.

The vice chairman also disclosed some of the bank's future expansion plans, including the opening of four more branches in Lebanon.

Also, he said, "we already have 14 branches in Egypt and 10 in Syria but we intend to open more of these branches this year."

He expected BLOM Bank Egypt to make a net income of more than $15 million at the end of 2007.

"We are making good profits from all of operations abroad," he said. "We are long-term investors and our expansion in the region proves that BLOM is keen to stay in the market."

In addition to BLOM, many leading banks such as Audi-Saradar, Byblos and Fransabank are expanding aggressively in the Middle East. Bankers say it is normal for Lebanese banks to enter new markets as the local one is too crowded.

Beirut 01-11-2007
The Daily Star

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