Byblos Bank profits down

13 percent of consolidated operations overseas

Byblos Bank saw its profits drop by almost six percent in 2012. The bank reported net profits of $169 million after allocating $66.7 million in provisions for non-performing loans. Lower margins and a weakened balance sheet expansion drove down Byblos Bank’s income, FFA Private Bank said in a flash note on the bank’s results. Net interest income fell by six percent on a yearly basis. Cost-to-income ratio rose to 45.6 percent, from 43.4 percent in 2011, due to higher operating expenses, and a nearly flat growth in operating income.

Alain Wanna, Deputy General Manager at Byblos Bank, said the achieved results are fair in light of the current political and economic circumstances. He said profits were reduced in favor of higher provisions. Byblos Bank took on a more conservative approach in 2012, increasing its provisions by 22 percent, despite lower gross Non-Performing Loans (NPLs), according to FFA. Gross NPLs represented four percent of gross loans, down from 4.4 percent in 2011.

Total assets stood at $17 billion, up from $16.6 billion at end-2011. Customer deposits grew by 4.4 percent to $13.4 billion. Loans to customers edged up by 3 percent to $4.1 billion. Coverage ratio (including specific and collective provisions and reserved interests) stood at 128.4 percent.

Operations in Syria represent just three percent of the bank’s consolidated operations. “Since the outbreak of confrontations, the bank’s management decided to reduce the size of its Syrian exposure,” said Wanna. In 2012 the bank cut down its loans portfolio and deposits in Syria by around 47 percent each. Byblos Bank also reduced its operations in Sudan. “Operations in Syria and Sudan now represent five percent of consolidated operations, down from seven percent earlier,” Wanna said.


Byblos Bank operates through subsidiaries in Armenia, Iraq, Congo, and Europe, namely Belgium, Cyprus, France, and the UK. Overseas operations currently represent around 13 percent of consolidated operations. “Expansion abroad is part of the bank’s strategy, but it is a matter of timing and destination market,” said Wanna. “We can expand through exploring new markets or expanding our already existing overseas operations, but both options require much deliberation.”

On the medium-to-long run, Byblos Bank is considering the prospects of expanding into Libya and other emerging markets in Africa. “In Libya no new banking licenses are being issued so any expansion there would involve acquiring an already existing bank and this too requires much time and consideration,” said Wanna.

Byblos Bank recorded a high level capital adequacy ratio, as per Basel III requirements. The bank issued $300 million of 10-year convertible subordinated bonds in December 2012, increasing its capital adequacy ratio to 15.5 percent, up from around 13 percent previously.