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| BLOM Bank s.a.l. |
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| Summary of Proposed Investment |
| Project number | 25646 |
| Company name | BLOM Bank s.a.l. |
| Country | Lebanon |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Active |
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| Date SPI disclosed | December 22, 2006 |
| Projected board date | January 22, 2007 |
| Previous Events | Invested: June 14, 2007
Signed: May 29, 2007
Approved: March 1, 2007 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
BLOM Bank S.A.L (formerly Banque du Liban et d’Outre Mer) was established in 1951, and is one of the oldest banks in Lebanon. Original core group of shareholders still holds the majority of shares. BLOM Bank is the largest bank in Lebanon in terms of assets, customer deposits and capital funds. It has a number of subsidiary banks and foreign branches, including BLOM Bank France (with overseas branches in London, Dubai, Sharjah and a wholly owned subsidiary in Switzerland) and Bank of Syria and Overseas. BLOM Lebanon operates a network of 47 branches in Lebanon, as well as 5 international branches – one in Syria, one in Cyprus, two in Jordan, and one in Damascus, and has a wholly owned subsidiary in Egypt (BLOM Bank Egypt). Furthermore, in Lebanon, the Group’s holdings include AROPE Insurance Company, an investment bank BLOMINVEST Bank and BLOM Development Bank. The Bank continues its policy of diversifying its services and developing corporate, retail and private banking, which are crucial elements within the Bank's strategy.
The purpose of this project is to increase access to finance to private sector companies and individuals who were adversely affected directly and indirectly as result of the conflict suffered Lebanon. The project is part of the Lebanon Rebuild Program involving up to 5 banks for a total of $200 million to be mobilized support to private sector enterprises affected by the conflict. Along with the Credit Lines in total amount of $100-$125 million to support corporate clients, the Program also offers a SME Risk Management Facility in a total amount of $75-$100 million. |
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| Project sponsor and major shareholders of project company |
| The project sponsor is BLOM. The main shareholder of BLOM is Bank of New York with 34.4% as a depository for GDRs. The remaining shareholders of the Bank are: Banorabe Holding (11.4%), AZA Holding (9.3%), Shaker Family (5.4%), Mrs. Nada Oueini (5%), Others – less than 5% each (34.5%). |
| Total project cost and amount and nature of IFC's investment |
| Total project cost is estimated up to $100 million, which will be covered under the proposed IFC investment of the said amount of A loan for IFC’s own account. |
| Location of project and description of site |
| The Bank’s headquarter is in Beirut, Lebanon. The Bank also has regional presence through its subsidiaries and branches in Syria, the United Arab Emirates, Jordan and Egypt as well as in Europe (Paris, London, Geneva, Cyprus and Romania). In total, BLOM has 76 branches and employs about 1,500 staff. |
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| Anticipated development impact of the project |
- Maintain and/or increase bank lending
With the destruction and economic downturn in Lebanon, private banks may reduce their loan exposures at the expense of SMEs, corporations and consumers. Any such reduction would cause loss of jobs and increases in the poverty rates. The proposed IFC investment should help maintain and/or increase bank lending to these groups, maintaining the economic well being of the underlying communities/stakeholders.
- Support for the private sector lending including SMEs and corporate clients
SMEs and corporate clients make up a large share of Lebanon’s economic output and including vital contributions such as employment generation in impoverished area. Increased access to finance to these target markets can re-start these currently under funded enterprises.
- Housing Finance
The facility would support the lending for housing finance. It is expected that the banks will provide financing in the form of housing mortgages, which will broaden access to finance for consumers to make affordable home purchase in Lebanon. |
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| IFC's expected development contribution |
IFC will offer investment and mobilizing activities with the near term benefits to enable the private sector companies; helping the economy to restart and avoid economic downturn caused by the conflicts.
IFC’s role is to provide a range of interventions over the near and medium term in post-conflict Lebanon, including the proposed credit line facility, risk sharing initiative and trade finance program, through commercial banks.
IFC’s program is designed to be an effective and timely response to provide the needed funding, up to $200 million, to support the private sector through the anticipated difficulties as a result of a recent conflict. |
| Environmental and social issues - Category FI |
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.
IFC will analyze and review the Bank’s portfolio, and the activities proposed to be supported with IFC financing, for types of transactions, size, tenor and industry sectors and determine the Applicable Requirements, if any, that would include a combination of:
- the IFC’s microfinance exclusion list(s); and/or
- the applicable National Environmental and Social Laws and regulations.
Based on the review, BLOM will be required to:
- Develop a Social and Environmental Management System (SEMS) prior to disbursement to the satisfaction of IFC and BLOM Bank, that ensures that activities supported by the facility are consistent with the Applicable Requirements;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS, to ensure that its investments/ activities supported by IFC financing are in compliance with the Applicable Requirements;
- Commit to take action to remedy any gaps in SEMS implementation on an on-going basis; and
- Submit a periodic report to IFC as per a format to be provided by IFC. |
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| For inquiries about the project, contact: |
Mr. Saad Azhari, Vice Chairman and General Manager
BLOM Bank s.a.l.
Berdun – Rachid Karami Street, BLOM Bank building, Riad El-Solh
Beirut 1107 2807, Lebanon
Telephone: (961-1) 743300 – 738938
Fax: (961-1) 738946 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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