CF Byblos Equity

Summary of Proposed Investment

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.

Project number	27808
Company name	Byblos Bank S.A.L.
Country	Lebanon
Sector	Finance & Insurance
Environmental category	FI
Department	Global Financial Markets Group
Status	Pend FAP

Date SPI disclosed	September 22, 2009
Projected board date	December 21, 2009

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

Byblos Bank (“BYB” or the Bank) is a strong locally-owned private bank in Lebanon, ranked the 3rd by total assets, equity, deposits, and net income. Founded in 1950, the Bank is engaged in commercial banking, followed by retail and investment operations. Headquartered in Beirut, BYB has developed a good domestic franchise of 75 branches in Lebanon and has expanded into 10 overseas locations through acquisitions and organically. BYB is a core asset of the Byblos Bank Group which also includes insurance business.

The Project is aimed to support the Bank’s growth in Lebanon and abroad.

Anticipated development impact of the project

The Project is expected to have a high development impact. It will:

-help the Bank to expand its financial services and products to SMEs and retail clients in Lebanon and other countries of the Bank’s existing and future presence;
-strengthen the capital base and adequacy of the Bank and demonstrate the ability of a Lebanese bank to attract investments from international institutional investors in a difficult financial environment;
-advance capacity and institution building of the Bank to transform the Bank into a leading regional player with best practices in business strategy, risk management, and corporate governance; and
-improve the Bank's capacity in social and environmental risk management.

IFC's expected development contribution

The Project will have a strong development contribution. It will:

-offer BYB a long term partnership key for the Bank to grow in a country affected by the knock-on effects of the global financial crisis;
-secure long-term capital funding to the Bank given lack of viable term funding alternatives in the currently frozen capital markets;
-create a strong demonstration effect for investors to engage with the private sector of Lebanon, characterized by limited access to long term finance; and
-facilitate the consolidation of the MENA region banking sector, critical for financial stability and intermediation in the region.

Environmental and social issues - Category FI

The Project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

During appraisal, IFC will analyze the Bank's portfolio, for types of transactions, size, tenor, and industry sectors and determine the Applicable Performance Requirements, if any, that would include a combination of: (i) The IFC Exclusion List(s); (ii) The applicable National Social and Environmental Laws and regulations; (iii) The IFC Performance Standards. IFC will also appraise the Bank's labor practices according to the IFC’s Performance Standards 2: Labor and Working Conditions.

Based on the review, the Bank will be required to: (i) Upgrade, if necessary, the existing SEMS, prior to disbursement to the satisfaction of IFC; (ii) Continue to retain responsible, qualified persons to manage and implement the SEMS; (iii) Commit to implement the SEMS, to ensure that its investments/activities are in compliance with the Applicable Performance Requirements; (iv) Demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions; (v) Continue to submit a periodic report to IFC as per a format to be provided by IFC.

IFC PROJECTS

RECENTLY DISCLOSED