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Dr. Makram Sader

LEBANON - Finance

Well Anchored

Secretary General, the Association of Banks in Lebanon (ABL)


Dr. Makram Sader has been the Secretary General of the Association of Banks in Lebanon (ABL) since 1991, where he is actively involved in the reorganization of the banking industry with an emphasis on regulations, along with highly recognized standards. He also acted as Chairman of Lebanon’s Banking Commission (ICC); he is a Board Member of the Caisse Nationale de la Sécurité Sociale (CNSS) in Lebanon, and a member of the Lebanese Economic and Social Council. He graduated from the University of Grenoble in France in 1979 with a PhD in Economics, and began his career teaching International Economics at the Lebanese University, carrying out, at the same time, several studies as a full time researcher at CERMOC. Between 1985 and 1991, he was nominated as the Director of Research & Studies at the Union of Arab Banks (UAB) and played a key role in inter-Arab cooperation on banking issues. Over 1998-1999, he contributed to the elaboration of the Lebanese government’s five-year Financial Reform Program and headed up the Banking Commission within the Syro-Lebanese Businessmen Council.

"Promoting the Lebanese banking sector is very important in order to have a robust industry."

Lebanese banks are known for providing a vital anchor of stability for the national economy despite regional challenges. What factors have created this resilience?

The stability of Lebanese banks is related mainly to the monetary policy implemented by the authorities in Lebanon, which helps to ensure the stability of the currency exchange rate, and provides a good environment for banking and financial stability. Lebanese banking stability is also affected by the implementation of international standards—it is an important issue for us in Lebanon to implement international norms. We are implementing all standards related to the financial field, particularly accounting and disclosure standards. We are operating in a small country with a small market; however, our bankers are also active in many regional and international markets. We are in more than 30 countries and around 100 cities worldwide, and you cannot have a different set of standards for every country. That is the second importance of adopting and implementing international standards, enabling you to operate in Jordan, Egypt, or Paris. Diversifying and investing outside of Lebanon is a good management tool for us.

The Lebanese banking sector has always been a pioneer in implementing international norms, such as Basel. What is the significance of keeping ahead, in terms of reinforcing the image and increasing confidence?

Promoting the Lebanese banking sector is very important in order to have a robust industry. The reason so many countries want to deposit and save with Lebanese banking is because it is solid and robust in implementing international standards. The main factor behind the Lebanese banking sector expansion over the last 20 years has been the implementation of sound banking. We have been tested many times during the last 20 years, yet we survived several severe crises nationally, regionally, and globally. During the 2008-09 international financial crisis, however, none of our clients who deposited with us lost a single penny throughout that entire period. As far as confidence is concerned, it takes a long-term relationship to establish confidence with clients. Confidence does not come from a one- or two-year relationship, but a long-term tradition of managing investors’ funds, and our investors have confidence in management skills of our bankers.

“Promoting the Lebanese banking sector is very important in order to have a robust industry.”

What are the other advantages of investing in Lebanon, and what would be your message to international investors seeking opportunities in the region?

Unfortunately, during the last two or three years we have seen the FDI in Lebanon decline more than 30% compared to the 2010 figure. For international investors, they will consider the regional business environment, and, since, the Middle Eastern region has been characterized by instability over the last three to four years. It was not attractive for investments; and this also impacted investment in Lebanon. The entire region is changing, but our banks continue to attract foreign investors for many reasons; the main Lebanese banks are listed, and they are publishing and disclosing their results every semester. The other reason is that we have been dealing with certain countries in our region where we have had a solid clientí¨le base for more than five decades. The investors in these countries are very pleased with our professionalism and our prudent management and finally with our transparency, and they trust us and like to invest in our banks.

What is your assessment of Beirut’s potential to regain the role of a major banking center in the region?

Personally, I do not think that Beirut is going to become the main regional banking sector. Throughout the last 30 or 40 years, the banking centers emerged in Arab countries like Bahrain, the UAE, and Qatar. Also, they developed in Jordan, Cairo, Morocco, and Tunisia. We cannot be number one in size taking into account the size of our economy, but certainly we will stay among the main regional banking centers. We are operating in more than 10 Arab countries and 20 other non-Arab countries. We have a lot of Arab investors in the capital of our banks. I believe we will continue to play the role of an active regional banking center, even though the competition is strong.

What are your expectations for the year ahead?

I do not see any dramatic changes occurring in 2015 for the Lebanese banking industry. We are fighting to keep our industry developing at a good growth rate—aiming at 6-7%—and if we can attain such a growth rate (6.6% in 2014) it will be enough to finance our economy and the public sector in foreign and Lebanese currencies. We need a minimum amount of growth to continue to serve our economy and state adequately. I think we will reach the necessary levels of growth on our balance sheet, and this will be an important objective for us. Our other main objective is to maintain banking stability and not to have any ripples in the system. I do not expect to see any dramatic changes in the monetary policy, the exchange rate, or interest rate, which will continue to be stable. The structure of prices—goods and wages—is expected to stay stable also in 2015; this is a manageable issue!

© The Business Year – March 2015



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