BEIRUT: The aggressive expansion of Bank Audi, Lebanon’s leading lender in assets and deposits, into the Turkish market has caused net profits in 2013 to fall by 16 percent to $301 million.
According to the statement by the bank on Thursday, net earnings reached $305 million, against $361 million in 2012 before the exceptional profits related to discontinued operations. Earnings then decreased by 15.6 percent mainly due to the initial launching stages of the Turkish banking subsidiary, whose network encompasses 31 branches with the subsequent normal time lag between immediate operating expenses and expected revenues.
But Audi’s consolidated assets surged considerably last year, despite the high cost of expansion into the Turkish market.
“Audi Saradar Group reached at end-December 2013 $36.1 billion, registering a growth of 15.4 percent relative to the corresponding period of 2012, i.e. an increase by $4.8 billion, sourced principally from Odeabank, the fully owned subsidiary in Turkey,” the bank said.
It added that this performance highlighted the bank’s capacity to adapt to rapid changes in the region.
“It also falls within the transformation strategy adopted by management, which revolves around securing over the medium term an entrenched positioning in the Turkish market, which still enjoys a large size and high levels of growth in spite of short-term volatility.”
It added that the bank had achieved net consolidated earnings of $305 million over the course of last year, posting a decline relative to the net operating profits of 2012. The report attributed this to the Turkish branch’s first year of operations, which managed in its first 14 months to rank 14th among the 33 operating commercial banks in Turkey with an assets’ market share of near 1 percent.
“The consolidated customers’ deposits reached 431.1 billion at end-December 2013, increasing by $4.3 billion relative to the corresponding period of 2012, driven mainly by the Turkish banking subsidiary, which registered a deposits growth of $4.4 billion,” the statement said.
“Consolidated net loans also increased by $4.3 billion,” it added.
The consolidated shareholders’ equity also reached $2.7 billion at end-December 2013.
“Adding to equity, the $350 million of subordinated debt accounted as Tier 2 capital as per Basel III, the bank’s gross regulatory capital would reach $3 billion. Accordingly, the bank’s Basel III capital adequacy ratio would reach 11 percent at end-December 2013, as compared to a 10.5 percent regulatory requirement.”