Blom Bank's success goes on with profit lift

Lebanon's Blom Bank continues to be one of the more resilient in the Middle East and North Africa region.

The lender, the country's second-largest bank by assets, last week reported an 11.5 per cent jump in first-quarter net profit to US$82 million, compared with the same period last year.

The bank's assets reached $22.8 billion, up $1.7bn from the first quarter last year, while deposits increased $1.6bn to $19.9bn in the same period. Shares in Blom have slipped 15 per cent since the end of January and yesterday closed at 8.8 Lebanese pounds on the Beirut Stock Exchange. Jaap Meijer, the head of the banking team at Alembic HC Securities, said the "stock looks now very cheap" after its recent underperformance.

Mr Meijer said the stock was vulnerable to a possible slowdown in Lebanon due to the political deadlock, but still offers a potential upside of 38 per cent.

Strict central bank regulations allowed Lebanese banks to escape the brunt of the global financial crisis two years ago, prompting expatriates to transfer more funds to Lebanon last year.

The country has had relatively strong economic growth, with GDP advancing 7 per cent last year. But deposits in the Lebanese banking sector are regarded as vital in helping the state to meet borrowing needs to finance a public debt equal to an estimated 129 per cent of GDP.

In March, Blom also announced it would pay a cash dividend of 675 Lebanese pounds per share for last year. Expansion is also on the horizon for the bank. Saad Azhari, the chairman of Blom, told Dow Jones this month the bank's focus remains on the Arab region and it will look at expanding its presence there as "we see great potential for fundamental growth … in the medium and long run".

Blom's overseas network is mainly in Jordan where it has a headquarters and eight branches, with another two opening soon.

It also has a branch in Syria and another in Cyprus, and a representative office in Abu Dhabi.

fhalime@thenational.ae