BLOM Bank is a leading Lebanese bank, which has repeatedly been recognised as the best in the country by many leading regional and international voices. As one of the oldest established banks in Lebanon, BLOM Bank has constantly been at the forefront of the country’s financial system. Its services revolve around the trust and credibility built with its clients through long-term relationships, integrity and the strong financial intelligence that underpins its success. The European caught up with Chairman and General Manager Saad Azhari, to learn more about the bank’s history, achievements and strategic partnerships.
Q: Tell us a little about the history of BLOM Bank.
Saad Azhari: BLOM Bank was established in 1951 as a commercial bank, originally its full name was Banque du Liban et D’Outre Mer (Bank of Lebanon and Overseas). True to its name, it soon expanded, first to Saudi Arabia in the mid 1950s, and then to the UAE and Europe in the mid 1970s, both with the aim of serving Lebanese and Arab expatriates in those countries. Today, the bank is present in 13 countries in the Middle East and Europe, and is a full-service, universal bank and one of the leading regional banks in Lebanon and the Arab world. Our motto, “peace of mind”, is meant to spread peace of mind across different regions through our wide range of outstanding services.
Q: Please outline the range of services BLOM Bank provides.
SA: BLOM Bank specialises in traditional and non-traditional banking services. It provides trade financing, and corporate, retail, investment, private, and Islamic banking, in addition to asset management, insurance, and capital market services. The bank is the leading retail and asset management bank in Lebanon, and the bank with the highest growing retail banking activities in Jordan and Egypt. In addition, it provides private and investment banking services in Lebanon, Europe, and Saudi Arabia, corporate banking services in Qatar and the UAE, and capital market services in Lebanon, Egypt, and Jordan. And, needless to say, one of the bank’s prime goals is to derive immense synergies and cross-selling from its horizontal and vertical spreads.
Q: How would you sum up BLOM Bank’s strategy?
SA: BLOM Bank is a conservative bank that strives for quality not quantity. Our goal is to not only be the best bank in Lebanon, but also the wider region. Its strategy, first, is to maintain excellent asset quality, tight control over risk and cost, and to be well capitalised and liquid; and, second, to attain measured horizontal and vertical expansions. As a result of its horizontal expansion, as mentioned earlier, the bank is present currently in major European and Middle Eastern countries, and its aim is to maximise the diversification of revenue, to spread risk, and to partake in growing and promising markets. In addition, our vertical expansion has proved to be very successful, enabling us to become a leading universal regional bank, and constantly introducing innovative, world-class, and highly secure banking and financial products.
Q: How have the unstable political and economic conditions in Lebanon affected the bank’s performance?
SA: The economic and political situation in Lebanon – and the region – has been in serious trouble since 2011. But such tough operating conditions are not new to Lebanon, for the country has been more or less going through them since 1975. So the banking system is used to working under such testing circumstances and is able to adjust its policies and strategies accordingly. As a result, we at BLOM Bank have been able to navigate these conditions with success, relying on our conservative, cautious credit policy, our strong financial metrics, and our outward expansion strategy. And the numbers speak for themselves. At the end of the third quarter 2015, the bank’s assets increased to $28.9bn, up by 5.2% from the same period last year; its deposits rose to $25.1bn, higher by 5.6%; and its shareholders’ equity reached $2.6bn, higher by 4.4%. Net profit increased to 289.8m, up by 7.6%, and was largely driven by higher profit in the bank’s foreign units. BLOM Bank achieved the highest rate of return on average equity (ROAE) among listed banks at 15.2%. The bank also remained highly efficient in its operations, and maintained a solid financial position. This was reflected in the lowest cost-to income ratio among listed banks at 37%,a high (Basel 3) capital adequacy ratio at 17.8%, an excellent primary liquidity ratio at 66%, and a good coverage ratio for nonperforming loans (including special and collective provisions, and real guarantees) at 163%.
Q: As well as expanding worldwide, BLOM Bank attaches a great importance to regional expansion. How are you strengthening your brand in Lebanon?
SA: BLOM Bank, remaining honest to its roots, has had a good outward expansion policy that took it also in the early 2000s to other major countries in the region, especially the Mashreq and the Gulf. As a consequence, the bank is now present in Lebanon, Syria, Jordan, Iraq, Egypt, KSA, UAE, Qatar, France, Switzerland, England, Cyprus, and Romania. The bank offers its services in these countries through 257 banking and financial units, and operates as one of the trusted local banks in the region, and as a specialised bank in Europe offering its customised services to the Lebanese and Arab expatriates. In addition, our foreign operations constitute now more than 30% – and growing – of the bank’s total operations. Of course, that does not mean that Lebanon is taking a back seat to our operations. On the contrary, it remains at the forefront of our activities, and the main home to our continuous flow of new and innovative products. These products play a crucial role in strengthening our established brand, and are not only original but sometimes unique globally. Among the more recent ones is the Giving Card that funds the removal of land mines in Lebanon, and e-Cash, an ATM service that enables people who do not necessarily have an account with the bank to cash money transferred by our clients. We also have the BTA card, a cobranded card with the Beirut Traders Association that has more than 1000 small- and medium-sized traders from the best shopping centres in the country; Al Mazaya, an Islamic fund that is Shariah compliant and includes shares from the best Saudi companies; a European real estate fund that is comanaged with the reputed, international financial firm Quilvest; and a new cobranded card with Uber.
Q: BLOM Bank has partnered with Uber to create UberBLOM, the first Visa prepaid reloadable card developed exclusively for Uber passengers. Tell us about this alliance.
SA: In September 2015, BLOM Bank became the first bank in the world to launch a co-branded card with Uber (the online international taxi company). It is a prepaid card that Uber customers can use or give their children to pay for their rides. While the card first went live in Lebanon, Uber expects to export the concept to other regions.