BEIRUT: Customer deposit growth of 16 percent, customer loan growth of 15 percent and higher fee income were among the key factors that saw BankMed achieve 8 percent growth in profits in 2012 despite the developments taking place in the country and the region, the bank’s executive general manager said Friday.
“The 8 percent increase in net profits of the bank is mainly driven by the balance sheet growth and the sensible way in which the bank managed to maintain its activities in 2012,” Mohammad Ali Beyhum told The Daily Star.
“Last year was full of challenges not only for our bank but for the banking sector in general. We can’t really say that 2012 was the best year for the bank, but in my book it was a very good achievement in view of the situation.”
BankMed, one of the five leading lenders in Lebanon, has recorded a net profit of $126.7 million in 2012 compared to $117.5 million in 2011.
Beyhum added that these results led to an increase in operating income of 14 percent, to reach $414 million, as total operating expenses increased by 24 percent to reach $258 million.
The increase in the bank’s operating expenses were mainly due to the expansion strategy in Lebanon and other countries as well as increasing the salaries of the bank’s staff following the Cabinet’s decision in February 2012 to hike the wages of the private sector employees.
BankMed also allocated $15 million for provisions which resulted in the loan loss provision to nonperforming loans ratio to reach 170 percent compared to a lower average in the Lebanese banking sector.
“We feel that we should be prudent to safeguard against any possible future change” Beyhum said.
Customer deposits increased by some 16 percent to reach $9.266 billion, customer loans increases by 15 percent to reach $4.018 billion and total assets increased by 6 percent to $12.507 billion. Equity increased by $301 million of which $225 million is in preferred shares.
Unlike other banks which have a presence in countries that were the scenes of political and security turmoil, BankMed did not have any operations in conflict-wracked nations and consequently the bank’s net profits, investments and loans basically remained unaffected by these incidents.
Beyhum also stressed that BankMed had increased the number of branches across Lebanon to 59 in order to cater to the needs of its customer base.
The lender also opened two new branches in Iraq, one in Baghdad and another Irbil.
BankMed was also the first Lebanese bank to tap into the prosperous Turkish market and has about 27 branches in Turkey spread over the major commercial locations.
Nevertheless the banker emphasized that BankMed would continue to pursue the clear strategy which it had drawn to maintain high profits.
The bank official emphasized that BankMed was keen to expand its operations outside Lebanon if the opportunity arose and if the conditions were ripe.
However, Beyhum declined to say whether BankMed planned to tap a specific market in the near future.