BLOM BANK (BLOM) of Lebanon has been consistently recognised as the country’s best performer by a range of leading regional and international industry voices. Its business operations are based on a universal banking model that spans a range of divisions, including: commercial banking, private banking, asset management, insurance, and retail and Islamic banking. It’s this breadth of expertise that has seen the bank continue to expand and progress in challenging circumstances.
We caught up with Chairman and General Manager, Saad Azhari, to learn more about BLOM’s ethos and how the bank is maintaining its strong performance amid a period of regional instability.
BLOM BANK is regarded across the industry as one of the Middle East’s leading financial institutions. What key attributes has the bank leveraged to achieve this?
Saad Azhari: At BLOM Bank we have dedicated ourselves to achieving a leading position by always developing the necessary tools and skills. Our regional reach is spread over seven key countries: Lebanon, Egypt, KSA, UAE, Qatar, Jordan and Iraq. We have a proud portfolio of world-class, universal banking services and products, which are at the cutting-edge of technological development and digital delivery. We are a reliable, safe, and rewarding financial institution. Our brand is guided in words and deeds by the motto “Peace of Mind” to all our stakeholders, and it is something that we have consistently delivered.
BLOM BANK’s reputation is based on trust and credibility. Please highlight the role these traits play in the bank’s success.
SA: The bank was established in 1951 as a single branch in Beirut, Lebanon. We have since developed a presence in 12 countries, including France, Switzerland, England, Cyprus, and Romania, and opened more than 225 branches. This growth and expansion owes its success to trust and credibility: trust is what brings customers to us, and credibility is what keeps them. Trust is dependent on quality products and relationships, and on delivering the services as promised, while credibility is dependent on quality staff and personnel who consistently deliver these services with accuracy and efficiency. We also rely heavily on customer feedback to reinforce these two attributes of trust and credibility through our Group Customer Advocacy department, which makes sure that a customer’s requests are met promptly and with fairness.
Please expand more on your motto “Peace of Mind”. How is this ingrained in the bank’s processes?
SA: As mentioned earlier, “Peace of Mind” is BLOM BANK’s motto in words and deeds. What this means in terms of a mindset is that the bank delivers its products and services by ensuring the maximum return at the lowest risk. It also means that we make sure that our products are delivered in the most efficient way, either through our branch network or through our digital channels. In addition, it means that we follow the most secure banking practices, maintaining excellent asset quality, liquidity, and capital adequacy, and abiding by all rules and regulations to keep the bank clean and reputable.
In the context of the wider community that transcends our stakeholders, we try to deliver “Peace of Mind” through prominent corporate social responsibility (CSR) activities, which cover humanitarian, educational, and cultural concerns.
Four CSR programmes stand out. To begin with we have the BLOM “Giving” card, a first of its kind and an internationally recognised card that contributes to the clearance of land mines across Lebanon and the planting of trees and green spaces. Second, there is the BLOM-Beirut Marathon, the premier sports activity in Lebanon, which supports a multitude of social and cultural causes. Third, we have “BLOM Shabab”, our internet-based programme that provides educational and career guidance to graduating students. And fourth, “ProtectEd”, a pioneering programme that spreads enlightening education to high school students about the need to promote a safe, clean, and discrimination-free society. All of our CSR activities are based on the premise that thriving banks depend on thriving communities.
BLOM BANK has maintained an impeccable track record despite the unstable political and economic situation in Lebanon and the wider region. What core values do you attribute this success to?
SA: Yes, despite the unstable economic and political situation in Lebanon, the bank has managed to maintain an impressive track record of good performance. At end June 2018, BLOM BANK’s net profit increased to $243.8m, up by 4.4% from end June 2017 and implying the highest ROACE and ROAA among listed banks at 15.81% and 1.45%, respectively. Also, assets increased to $34.6bn, higher by 10.5%; deposits rose to $27.1bn, up by 1.6%; and loans stood at $7.43bn, down by 3.4%. As important, the bank maintained a very strong financial position, as exemplified by a capital adequacy ratio of 18.5%, a primary liquidity ratio of 88%, a net NPLs ratio of 0.4%, a loans coverage ratio by specific provisions and real guarantees of 136%, and a cost-to-income ratio of 36.53%, which is the lowest among listed banks.
As to the core values that are behind this success, I would say: prudence, professionalism, performance, and improvement. Prudence is what underlies our conservative strategy and our emphasis on controlling risk and cost. Professionalism is what is behind our drive for excellence, and our quest for efficiency and higher productivity. Performance is the designated outcome of our concern for prudence, quality, and professionalism. And improvement is what is behind our aim for continuous innovation and the creative drive for new products, services, and processes.
Does BLOM BANK have other international expansion plans over the next 12-24 months?
SA: As mentioned earlier, we are currently present in seven countries in the Middle East region and in five countries in Europe; the group’s spread is made up of 15 banking and financial units. We were also located in Syria, but we have written off that investment because of the war there. Our expansion strategy is to rely on organic growth – except for our expansion into Egypt and our acquisition of HSBC Lebanon – though we are always open to new, worthwhile acquisitions. We are currently concentrating on consolidating our position in the Gulf region and in Egypt, and we are giving priority to enhancing our internet banking capabilities and less so to opening new branches. Although at the moment we do not have a specific expansion in mind in the region or beyond, we remain open for further expansions in the near future once the right market opportunities are available, especially if they come with the appropriate licences.
Which areas of business is BLOM BANK most keen to develop?
SA: We are always aiming to develop all aspects of our business – be it commercial, retail, corporate, investment, private, or Islamic banking. We are the leading bank in retail, so naturally we would like to maintain that position and elevate other areas of our business to that level. In particular, we have been steadily developing our operations in corporate and trade finance, especially after the success of our HSBC Lebanon acquisition, which had considerable expertise in those areas. We are also keen on developing our private banking activities both inside and outside Lebanon, and on gradually transforming the bank into a digital bank, not just a bricks and mortar one.