Lebanon 2012 | FINANCE | INTERVIEW

TBY talks to Nadim A. Kassar, General Manager of Fransabank, on the history of the bank, its performance over 2010, and international opportunities.

Nadim A. Kassar
Over his successful career Nadim A. Kassar has been instrumental in the growth and development of Fransabank, and is currently the General Manager of the bank.

What is the story behind Fransabank and its growth in Lebanon and overseas?

Established since 1921 and listed first amongst banks in Lebanon, Fransabank today enjoys the ranking of a top-four leading Lebanese bank. The Group's banking and finance legacy dates back over more than nine decades of excellence supported by its very responsible role in the multi-dimensional development of the economies and communities it serves. The Group has succeeded in establishing, developing, and consolidating a competitive edge that earned it a leading position amongst the Lebanese banking community and the countries into which it expanded. Today, Fransabank Group has a consolidated presence in nine countries: Lebanon, France, Algeria, Syria, Sudan, Belarus, Libya, Cuba, and most recently in Cyprus and very soon in Iraq. The Group also ranks first in terms of local branch network with 107 branches strategically spread all over the country, providing the Lebanese community with all types of banking products and services to satisfy their personal and professional banking wants and needs. Fransabank Group succeeded in positioning itself as a forward-looking, trustworthy, dynamic, innovative, creative, and socially responsible leading financial group that has been providing top-notch financial services to its clients in particular, and to the banking industry at large, while always putting the client at the heart of all its activities. Fransabank Group offers its large clientele universal banking services and activities mainly through its main commercial bank, Fransabank SAL, and its local and foreign subsidiaries and associates.

How were the bank's financials for 2010?

The year 2010 carries a very special significance for Fransabank Group. It was the eve of its 90th anniversary and marks at the same time another record performance year for the Group. In this context, it evidenced a strong profit growth track, with an increase of 39.84% in net profits, translated into $145.74 million in 2010, out of which $92.58 million are attributed to the mother company Fransabank SAL. This growth is mainly due to the Group's effective strategy at home and in selective regional and international markets, complemented by the Group's efficient management of its expenses exposure. Total assets reached $12.24 billion, growing by 13.24% relative to the end of 2009; customer deposits reached $10.08 billion, growing by 11.86% as compared to the same period of 2009, and the loans portfolio reached $3.14 billion, growing by 36% as compared to the same period of 2009. The cost-to-income ratio stood at 48.30% in 2010 as compared to 54.70% in 2009. Return on average equity (ROAE) and return on average assets (ROAA) stood at 13.27% and 1.26%, respectively. The capital adequacy ratio (CAR) stood at 12% as of end-2010, which is above the minimum CAR required by the Banque du Liban.

In what areas is Fransabank focusing on for its core revenue streams?

Fransabank offers its clients a large basket of carefully developed and marketed products that ensure its clients a universal banking experience, whereby they can find at our one-stop shops all the banking and financial products and services needed. Our range of products and services includes retail, corporate, SME, investment, and private banking in addition to a broad range of other financial services. During 2010 and the first quarter of 2011, a set of products and services were offered to our client base. Special attention has been given to SMEs as we created several SME products like the pioneering “agriculture loan" and the first of its kind “energy business loan" and the “commercial vehicle loan." Several new housing loan programs were also introduced to the market. Fransabank was the first to launch tailor-made housing loans for the displaced, for members of the Internal Security Forces, and for judges. This leads us to the bank's continuous desire to maintain a sustainable and balanced partnership between the private and public sectors, which is clearly evidenced through such products and other customized offerings presented in 2010 and in 1Q2011.

“The Group's banking and finance legacy dates back over more than nine decades of excellence."

How do you see the business environment currently in Lebanon, and how is that knowledge changing your overall market strategy?

The Lebanese economy grew by approximately 7.1% in 2010, and this is in addition to the previous three years where Lebanon has grown an average of 24% over that period. The Lebanese banking sector has achieved a growth rate of about 12% in 2010. This reflects the rather sustainable level of customers and investor business activity during 2010. The current political internal instability coupled with the unprecedented events that our region is experiencing has created a slowdown in the Lebanese economy. Despite this, economic activity in April and May 2011 has witnessed some relative improvements, and we are all hoping for further improvement.

What has been the level of growth in foreign-based assets?

At Fransabank, outside of Lebanon, we have a consolidated presence in eight international markets: namely France (since 1984), Algeria (since 2006), Syria (since 2007), Sudan (since 2005), Belarus (since 2008), Libya (since 2008), Cuba, and most recently in Cyprus (since 2010). We are in the process of consolidating our presence in those countries and the results that have been achieved in 2010 are very promising and indicate a greater contribution by our international presence to our bottom line.