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Four banks vie for Standard Chartered assets

  • Standard Chartered Bank. (The Daily Star/Mahmoud Kheir)

BEIRUT: Four Lebanese banks are vying to acquire the license and assets of Standard Chartered bank in Lebanon with strong indications that the winner would be determined in less than two weeks, bankers said Thursday.

London-based Standard Chartered, whose operations in Lebanon are relatively small compared to its activities in other emerging countries, has expressed interest in selling its retail business in Lebanon and to open instead a representative office in the country.

The bank’s total deposits are only around $80 million, a very small figure compared to deposits of other Lebanese lenders.

According to the bankers, who spoke on condition of anonymity, bidding had been confined to IBL, First National Bank and Cedrus Invest Bank, but Bank Audi made a last-minute offer to buy the retail operations of Standard Chartered in Lebanon.

“ Bank Audi is currently holding talks with the management of Standard Chartered and the Central Bank. Cedrus seemed to have a good chance to buy the license and assets of the bank until Audi decided to step in,” a banker told The Daily Star.

Founded in Beirut in 2011, Cedrus Invest Bank is the largest specialized bank in Lebanon in terms of capitalization, with a paid-up capital of $52 million and more than $400 million in assets under management and administration.

Sources said Cedrus could raise its capital if it wanted to acquire Standard Chartered’s assets in Lebanon.

Some bankers expressed their surprise at reports that Bank Audi had decided to make an offer for Standard Chartered.

“Why would a large bank like Audi be interested in a small bank like Standard Chartered, whose total assets are less than $100 million?” asked one banker familiar with the negotiations.

He said the Central Bank would not only take the highest offer into consideration, but also the fate of the employees and the license.

All of the bankers interviewed by The Daily Star stressed that the talks were shrouded in secrecy amid signs that the winner would be announced in less than two weeks.

One source explained that Standard Chartered’s shareholders equity is only $15 million.

“The potential buyer will add the price of the license and the capital of the bank. They [bidders] usually buy the equity and multiply them by 1.4 or 1.3,” the source said, declining to provide any estimates about the bank’s true value.

Insiders said Cedrus was keen to acquire the license and assets of Standard Chartered and expand its business to commercial banking.

“Standard Chartered [has its] headquarters in Dbayyeh and two other branches in Hamra and Ashrafieh. The bank also has licenses to open two more branches. This will be very suitable for any investment bank which has no branches or trained employees,” one banker said.

 
A version of this article appeared in the print edition of The Daily Star on January 10, 2014, on page 5.
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Summary

Four Lebanese banks are vying to acquire the license and assets of Standard Chartered bank in Lebanon with strong indications that the winner would be determined in less than two weeks, bankers said Thursday.

According to the bankers, who spoke on condition of anonymity, bidding had been confined to IBL, First National Bank and Cedrus Invest Bank, but Bank Audi made a last-minute offer to buy the retail operations of Standard Chartered in Lebanon.

Sources said Cedrus could raise its capital if it wanted to acquire Standard Chartered's assets in Lebanon.

Some bankers expressed their surprise at reports that Bank Audi had decided to make an offer for Standard Chartered.

Insiders said Cedrus was keen to acquire the license and assets of Standard Chartered and expand its business to commercial banking.


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