BankMed looks beyond Lebanon

The Beirut bank hopes to carry the momentum gained from its national success into international expansion

 

Headquartered in Beirut, BankMed is one of the fastest-growing banks in Lebanon. Originally established in 1944, its market share – measured by total assets – has grown over the years to comprise almost 10 percent of the total Lebanese banking system.

Through its 55 branches spread all over Lebanon, and one in Cyprus, the bank offers a wide range of innovative products and quality services that are tailored to individuals’ as well as corporations’ needs. Results achieved in 2011 placed BankMed as the top performer among its peers, with its net profits increasing by 11.3 percent to reach $117.5m by the end of the year, compared to $105.6m in 2010. At the end of the first quarter of 2012, BankMed’s total assets stood at $13.60bn and customer deposits recorded $11.12bn.

Overall, the bank achieved net profits of $29m in the first quarter of 2012, an increase of 13.9 percent when compared with the same period last year.

BankMed has been traditionally known as a corporate bank given the key role it played in funding the reconstruction of the country in the 90s after the end of the war. Nonetheless, understanding the importance of keeping pace with the needs of a fast-changing financial landscape, BankMed has opted to expand its banking services to also include retail, private, commercial, investment, and brokerage services. Thanks to its distinctive customer-oriented culture, which delivers speed in processing and responding to client requests, BankMed has been able to successfully cater to individuals, large corporate clients, as well as small and medium enterprises (SMEs).

In corporate banking, BankMed has continued to hold one of the largest commercial lending portfolios in the Lebanese market, covering top tier corporate clients that vary across all industries. Its historical focus on the corporate sector has endowed the bank with a more focused business model and a history of transaction structuring. In 2011, and in spite of the regional turmoil and its financial consequences, BankMed’s commercial lending portfolio witnessed considerable growth, outperforming its peer group and achieving an average growth of 25 percent in its loan portfolio; the highest among Lebanese banks. The bank has managed to attract new clients and expand its customer base, especially with the establishment of a dedicated International Banking Business entity, created to better serve its current customers outside Lebanon. In recent years, BankMed has put efforts towards enhancing trade finance, given its increasing demand.

With its strong network of banking partners, which consists of more than 70 names in over 55 countries (all reputable firms with excellent services), BankMed has been able to successfully expand its trade finance activities on both primary and secondary markets, and explore new avenues of opportunity.

Products and services
BankMed’s retail banking has seen significant growth in recent years with the continuous introduction of unique retail products and services. The bank has enhanced its delivery channels by adding new branches, entering new markets, and acquiring a full range of state-of-the-art remote delivery channels. Furthermore, new products and services have been introduced, tailor-made to customers’ individual needs, including new loyalty cards, gift cards, and payment cards.

On the investment front, BankMed’s treasury has offered its clients access to local, regional, and international markets through its extensive and solid relationships with brokers and market makers around the world. In 2011, the treasury focused its efforts on structuring and marketing different hedging and investment products. It has also successfully diversified its liquidity profile, minimising counterparty and sovereign risk without any effect on overall profitability. Available 24 hours a day, brokerage services have been handled by the bank’s wholly-owned subsidiary, MedSecurities, the brokerage arm of BankMed. MedSecurities managed to end the very challenging year recording an increase in net income of 12 percent, with the introduction of new investment products and services.

Recently, BankMed has geared its efforts toward a focus on SMEs: an increasingly important segment of the economy. As such, and given its growing concern with sustainable community development, BankMed established Emkan Finance s.a.l in June 2011; a financial institution licensed by the Central Bank of Lebanon. Ekman Finance has (up to March 2012) provided over $30m worth of microloans for the economically active poor in Lebanon, whose number has extended to about 20,000 borrowers, thereby allowing clients access to microfinance services unavailable to them in the formal banking sector.

In terms of sustainability and green banking, BankMed’s environmental initiative Happy Planet – launched in 2009 – has entered its fourth consecutive year, receiving positive feedback from customers, stakeholders, and the general public. Happy Planet has highlighted the bank’s commitment to preserving Lebanon’s natural heritage and developing its community and its people. Under this initiative, BankMed has continued to raise awareness about issues pertaining to the environment, to fund many environmental programmes, and to undertake various projects in collaboration with relevant ministries, NGOs, and educational institutions. Such projects have ranged from planting trees in several villages and reserves, to cleaning shores, building solar energy lighting, and promoting eco-friendly cars. Moreover, BankMed has committed to offsetting its corporate headquarters’ carbon footprint, making it the first Lebanese bank to do so. Happy Planet has also expanded to encompass areas that go beyond just the environment, including education, sports, culture, and community development.

International presence
BankMed is a dynamic bank with international presence in Cyprus, Switzerland, Turkey, Iraq, and Saudi Arabia, having opted to expand only in selected markets, where it could add value. This well-studied oversees expansion of BankMed has proven to serve the bank well as it has no presence in countries that are directly affected by the change in the Arab world.

BankMed’s private bank in Switzerland, BankMed Suisse, has engaged in asset management and advisory banking services, reinforcing the bank’s private banking offering across different markets, and encompassing both traditional banking services as well as innovative products. On the regional level, BankMed has expanded its presence to Turkey since 2007 through T-Bank. With its 27 branches across Turkey’s most prominent industrial and commercial hubs, T-Bank has provided its customers with unique banking solutions in line with its niche banking approach. T-Bank has enjoyed a robust position in the banking sector with its expertise in commercial lending, treasury products, and trade finance services.

During 2011, T-Bank has continued with its financial and operational achievements, thanks to the established banking experience and vast correspondent network of its main shareholders. T-Bank has focused on utilising its prominent branch network to diversify its product offers to its existing customers, and into gearing-up marketing efforts to attract new ones. Today, T-Bank is singled out as the most important partner for Turkish entrepreneurs willing to operate in the MENA area. Moreover, with other Lebanese and Arab banks only now grasping the growth potential of the Turkish economy and starting to seriously consider the Turkish market, BankMed’s early entry into the market has given it a strong competitive advantage.

Since 2008, BankMed has opted to expand its activities to investment banking through the establishment of SaudiMed Investment Company in Riyadh, providing investment and corporate advisory services to a growing clientele base in Saudi Arabia and the Middle East region. SaudiMed has continued to pursue several local and regional corporate finance advisory mandates throughout 2011, in various industries and sectors; namely health care, real estate developments, industrial raw materials manufacturing, and credit card services. Through its dynamic business structure, controlled growth strategy, and its team of dedicated professionals, SaudiMed has continued to be well positioned to capitalise on the opportunities available in regional markets, particularly Saudi Arabia.

Moreover, based on its extensive experience and in line with its plans for further regional expansion, BankMed has announced the opening of its two new branches in Erbil and Baghdad, Iraq. Both branches became fully operational in May 2012. This step has been coupled with the bank’s strong belief in the potential of the Iraqi economy. Through its two new branches, BankMed will provide high-quality trade finance services including foreign exchange, letter of credit, letter of guarantee, and documentary collection.

On the whole, and in spite of the recent global and regional instabilities, BankMed has been able to grow its business and to expand and strengthen its regional and international presence. The double-digit growth recorded in 2011 has served as an indication of the strong performance of the bank’s activities. BankMed’s strategy moving forward is to further expand its client base and take advantage of new innovations and technologies in order to better serve them.