BankMed continued in the first half of 2011 to record the steady rates of growth that it has been registering over the last five years.

2011 has been particularly challenging for the regional banking sector since the start of the Arab Spring phenomenon. Though likely to be promising in the long-term in terms of economic consequences, the Arab revolutions have caused regional investors to pause, trade to falter, and capital flows to decelerate in the short-term. Growth rates have plunged in the affected countries in North Africa and the Middle East, and consequently the repercussions were felt everywhere. In fact growth rate forecast in Lebanon has been revised down by the IMF to two percent in 2011, after recording four years of growth averaging eight percent in real terms, a rate that was among the highest in the world.

Under these challenging circumstances, BankMed managed to maintain its growth drive as reflected by the figures for the first half of 2011: assets grew to reach $11.4bn, taking into account the implementation of the new IFRS standards. Deposits grew by the same rate, and they constitute over 86 percent of total liabilities, reflecting the stability of the funding sources of the bank. Meanwhile, loans to the private sector grew by 11 percent in just the first half of 2011, compared with an average of 6.7 percent for the entire Lebanese banking sector.

Multi-sector approach
This reflects the continued growth in the various business lines at BankMed, be it the corporate sector, where BankMed always held a comparative advantage since contributing strongly to the rebuilding of the country in the 1990s; or in the SME sector, where BankMed is significantly boosting its resources given the potential of the sector in Lebanon; or in the retail sector, where BankMed has proven itself as one of the major players in the field through the introduction of various loans tailored to the needs of the Lebanese consumer.

With solid growth recorded in its loan portfolio, BankMed maintained a relatively low loans-to-deposits ratio of 43 percent – one of the lowest in the region – which reflects the solid liquidity position of BankMed. The bank is also well capitalised, with a capital adequacy ratio of more than 11 percent (Basel II) as of December 2010, and loan-loss provisions to non-performing loans at 219 percent as of June 2011. Profitability has remained high despite the deteriorating global, regional and local economic conditions, and net profits were recorded as $59.4m for the first half of 2011: a growth of 13 percent over the same period in 2010. Net interest income increased by 18 percent to reach $102m, while commissions and fees increased by 36 percent to reach $26m. As a result, operating income increased by 28 percent to $205m, while operating expenses increased just eight percent to $103m.

Geographical diversification
BankMed’s regional presence extends to two of the most stable and promising countries in the region: Turkey and Saudi Arabia. BankMed has had a Turkish presence since 2007 through T-Bank, a joint venture with Arab Bank, which specialises in SME lending and trade finance. BankMed has been supporting the consistent growth of T-Bank which saw its headcount, branch network and balance sheet all more than double over the last three years.

Turkey is the fastest growing economy in Europe and one of the best performers globally. BankMed believes that its presence there allows for a great opportunity to capitalise on the potential of the country.

BankMed is present in Saudi Arabia through an investment arm – the SaudiMed Investment Company – which seeks to capitalise on the opportunities offered by the large and ambitious investment programme that is planned in the country over the next few years. The SaudiMed Investment Company also seeks to create synergies that are offered with the group’s businesses: from construction and real estate management to power and printing.

BankMed is confident that through its highly qualified management team, dedicated staff, and extensive local and regional network, it has embarked on a promising path of growth and performance.