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Dr. Salim G. Sfeir

LEBANON - Finance

Getting the Priorities Right

Chairman of the Board and General Manager, Bank of Beirut


Dr. Salim G. Sfeir has been the Chairman of the Board and General Manager of Bank of Beirut since 1993. He is also currently the Chairman-CEO of The Bank of Beirut Group. He joined Bank of Nova Scotia in 1971. From 1980 to 1983, he occupied the position of Deputy General Manager at Banque de la Mediterranee. He founded Wedge Bank (M.E.) in 1983 and was appointed General Manager and Member of the Board of Directors. From 1985 until 1991 he held the positions of General Manager and CEO, Wedge Bank (Switzerland) S.A., Geneva and remained in that position until 1991. In 1992 he was appointed Vice Chairman and Managing Director of Wedge Bank (M.E). In parallel to his banking career, he was a lecturer of economics, finance, and marketing at the Lebanese University, Lebanese American University (LAU), Haigazian University, and Universite Saint Joseph. He holds a BSS degree in Economics from the University of Montreal and an MBA from the University of Detroit.

"For the last 20 years, Bank of Beirut has each year outperformed the previous one."

In June 2014, Banker ME officially designated Bank of Beirut as “The Fastest Growing Bank in Lebanon” for 2013. To what do you attribute that success?

It was the vitality and dynamism of my colleagues. We operate in a team-oriented environment; I believe we were very fortunate to have been able to bring together a remarkable team at all levels and in all divisions. We are one of, if not the, youngest bank in the marketplace. The average age of our staff members is the lowest in the banking industry of Lebanon. What differentiates us is that upon taking over Bank of Beirut in 1993, we did not inherit a senior generation of employees. Our team is very young and highly educated. We do not spare any effort to employ additional well-experienced staff from overseas who can further add to our existing knowhow and experience; as their international exposure would enhance our business. The advantage of one bank over another is the extent of opportunities captured from the new generation of bankers as the tools currently utilized are much more sophisticated than those in the past. A young team provides a high competitive edge to our daily operations. The outlook is different, the horizons are different, and the energy is unlimited.

Bank of Beirut has an enviable 12.6% equity ratio—number one among the alpha banks in Lebanon. What strategies have allowed you to achieve this exceptional ratio?

In fact, we work in parallel with our requirements in order to continue increasing our equity. We do not wait until there is need for a capital increase to request it. We are invariably ahead in additional funds in order to fund our costs. And we do not distribute over 35-40% of our yearly profit. So we have almost 60% of our annual revenue reinvested in the business.

“For the last 20 years, Bank of Beirut has each year outperformed the previous one.”

How would you assess Bank of Beirut’s performance in 2014?

We did very well in 2014 in all growth indicators. Our total assets grew by 9.69% YoY, and net profit after tax increased by 20.65%, to reach $175 million. For the last 20 years, Bank of Beirut has each year outperformed the previous one. It is obviously another consequence of the productivity of each and every team member in all market segments. It is rewarding everyone positively.

What strategy will Bank of Beirut follow to sustain growth in 2015?

Bank of Beirut is primarily a trade finance-oriented bank. Each bank has its own characteristics. We are the leader in the market in trade finance, in housing loans, and in asset management. We intend to add additional segments in the near future. Regretfully, 2015 will be much different than the previous years. The regional environment is politically more difficult. Our markets are smaller. The Lebanese market itself has shrunk due to the prevailing political situation in the country. If we should add the pressures imposed from compliance procedures throughout the region, we could say that 2015 would be more taxing than the previous years. Growth is sustained through two types of strategies; one is human-oriented, whereby we keep our teams well motivated by constantly assessing their performance. This is the role of management. The second type of strategy is beyond our control. It is highly linked to the political environment, be it in Lebanon or the region. We will therefore do our best and pray that all will turn out in our favor.

What steps is Bank of Beirut taking to maintain/increase its market share in overseas markets?

This is another characteristic of Bank of Beirut, we do not pursue market share. Our main focus is how to outperform our previous year’s profitability. Shareholders look for dividends and additional profits and for increase in their investment. We aim at that direction rather than market share. Our prime concern is providing added value to our shareholders’ investments rather than increasing our market share at a higher cost. At times the two parameters work in parallel; however, more often than not such is not the case. I wish these would, but it is not within our control.

What role does innovation play at Bank of Beirut?

Bank of Beirut offers plenty of innovative solutions. Most importantly, is to take advantage at the right time of any added solution. We are here to assess and introduce fresh solutions to our customers’ needs. More often than not you do not need a Ferrari to drive to the city as it is not always the case that high technologies serve your objectives, but rather the necessary technologies that would serve your objectives. Our IT people are always keen to acquire new technology and we are enthusiastic about new achievements. Here, we have to assess the right innovation at the appropriate time. Our markets are not yet as sophisticated as the highly developed markets, such as the UK or the US. Our markets are more customer oriented, to the extent that we have to adjust and to cater to our customers’ needs.

What is your mid-term outlook for Lebanon’s banking sector, as well as Bank of Beirut’s role in it?

There is no straightforward answer to this question. Our target is to continue surpassing our own performance, whether it will help us to further penetrate the market remains to be seen. We care about exceeding our own performance rather than watching our competitors. We care about our own statistics and our internal growth. In the long run, we will see if we were relatively better rewarded than the competition. To date, we have succeeded in outperforming the competition. Whether this will continue remains to be seen.

© The Business Year – April 2015



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