What have been your milestones over the past year?

MOHAMED ALI BEYHUM First, you have the profile of the bank; most of our growth in previous years has come from our expansion beyond Lebanon. Since then, we have increased growth of our bank in Turkey. We had several capital injections in conjunction with our partners in Arab Bank, because we are a 50-50 joint venture. We have opened up in Iraq, in Erbil and Baghdad, and have plans to open a branch in Basra. At the same time, we are looking at considering opportunities in Turkey especially, and also with our lines of business inside Lebanon as well. In terms of local growth, we had good expansion in comparison to other banks. To cater for all this expansion, we have increased our capital and injected an additional $200 million in equity; we erased close to half a billion dollars in debt in 2012. Overall, our expansion plans are very opportunistic, and we selectively enter new geographical areas where we find the most investment and the right climate. We have certain plans for different parts of the region and also Africa.

HADI NAFFI We have opened two additional branches, one on Verdun street in Beirut and the other in the suburb of Zalka. With that, we have now reached our current target of 18 branches covering the nation. In 2014 we will hopefully add two branches in Beirut and its environs, as 80% of Lebanon’s GDP derives geographically from the capital. Meanwhile, successful human resource management has enabled us to compete with any bank in the market as in addition to advanced IT systems, we have the necessary human capital.

Where does Lebanon stand in terms of Basel III?

MAB First, the Banque du Liban imposed certain new regulations concerning capital adequacy ratios (CAR). As a matter of fact, the rate being imposed on Lebanese banks is much higher than is seen elsewhere in the region. By 2015, CAR of banks in Lebanon must be a minimum of 12%. That is, the overall capital adequacy for core capital should be 8% or more. We are considerably more conservative than Basel III requirements, which are much lower than that, and actually give more grace to the banks. This is obviously very good for the banking sector, especially given the regional environment. We need to have a very solid base, and as far as BankMed is concerned, we are already very well capitalized; today we have a CAR of 13% plus. We have run all kinds of scenarios and projections to see if our current capital is sufficient for our expansion plans over the next three to five years. It has proven to be more than adequate and we feel very comfortable with our capital base.

HN We are very advanced. You would be surprised to learn that in Lebanon most banks are able to comply with Basel III, even though many international banks do not today. Our status in this respect is the result of monetary policy and the Central Bank’s strict regulation.

How has your portfolio evolved over the past five years?

MAB BankMed has changed strategically in terms of the growth of different business lines. Having very much been a corporate bank, we shifted toward a more aggressive retail banking expansion strategy. We also moved into the investment banking and brokerage business lines. That was the strategy five years ago, and we are still following the same plan. We are sustaining double-digit retail growth, and in fact this segment registers double the growth of the bank’s other business lines. We are also heavily geared toward fee income, and ensure that we leverage whatever balance sheet growth we have accordingly.

What is the focus of your growth strategy?

HN We have been successful in corporate activity, mainly with commercial loans. Now, our focus over the coming two or three years is not only to maintain growth in retail banking and housing loans, but also to focus mainly on developing our commercial and corporate banking activity. We are about to launch a new user-friendly IT platform. This will mean increased productivity, and will provide better reporting for management utilizing superior tools with which to make quicker decisions.