Strong Arab ties drive Lebanon bank to Turkey

Lebanon’s Bank Audi has been authorized to open a Turkey unit with capital of $300 million. The developing Turkish and Arab ties triggered the lender’s interest in the country, a senior executive tells the Daily News
This company photo shows the Beirut headquarters of Bank Audi. The group’s chief finance executive says Turkey promises a big potential, particularly in middle firms’ section.

This company photo shows the Beirut headquarters of Bank Audi. The group’s chief finance executive says Turkey promises a big potential, particularly in middle firms’ section.

Bank Audi, Lebanon’s leading lender, will enter the Turkish market with a strong business plan, following an authorization by Turkey’s banking regulator to give the bank a license to operate in the country, chief financial officer of the bank Audi Sal-Audi Saradar Group has told the Hürriyet Daily News.

Turkey’s Banking Regulation and Supervision Authority (BDDK) gave a license to Lebanon’s Bank Audi Sal-Audi Saradar Group to establish a bank in Turkey. Bank Audi is authorized to collect deposits in Turkey through a bank with a capital of $300 million, the BDDK decision published in the Official Gazette in Ankara on Oct. 28 read.

Bank Audi has the size and financial flexibility to provide top-notch services to the Turkish market, Freddie Baz, the group’s CFO and strategy director, told the Daily News in a phone interview on Oct. 28. “The exponential growth in trade and capital flows between Turkey and the Arab world in the past decade is what triggered our interest in the country.”

It is important to ensure footprints in a country that offers great domestic opportunities and is also playing a major role in the region, Baz said, recalling that the trade volume between Turkey and the Arab world was $35 billion in 2010. “Thus we aim not only to build capital market share in Turkey, but also play a major role to further increase trade flows between Turkey and Arab countries,” Baz said. Many Bank Audi clients are already enthusiastic for the bank’s expansion to Turkey, hoping they will expand or initiate new trade relations with the country.

Although Turkey’s economic growth has had a great positive impact on the banking sector, there are still a lot of growth prospects with respect to huge potential existing in Turkey in terms of labor force and resources, Baz said.

Middle segment potential

“We believe there are lots of undiscovered segments in Turkish markets, especially in the middle enterprises segment, where we want to bring added value and develop franchises,” Baz said.

Bank Audi is a group of 10 banks and one investment company present in 11 countries. “We rank among the top 20 leading Arab banking groups and are the largest bank in Lebanon,” Baz said.

Another very important consideration for Bank Audi is the large corporate market segment, according to Baz, who said they would deploy resources in order to help this segment by providing them with financing.

Lebanon attracted $62 billion in liquidity last year and Bank Audi alone enjoyed primary liquidity worth $6.1 billion, according to Baz. “Local [Lebanese] regulations allow to deploy a part of this liquidity to Turkey, under certain considerations,” he said, adding that this implied hundreds of billions of dollars could be pumped in as liquidity to Turkish markets.

“This is important, especially at a time that we know all banks at the regional or global level, are suffering from a scarcity of liquidity.”

‘Lots of Turkish friends’

“We have a lot of friends in Turkey and we are in continuous cooperation with our Turkish counterparts through corresponding banking channels,” Baz said, praising Turkish banks for their professionalism with which they are covering the market.

“It’s an important thing that there’s investment in Turkish banking at a time when risks for the global system are rising,” Tevfik Bilgin, head of the banking regulator that issued the license, said in a telephone interview, according to a report by Bloomberg news agency on Oct. 28. “Bringing capital of $300 million is an important signal too; it’s 15 times the minimum capital and sets a psychological benchmark for others who may want to enter the system.”

Friday, October 28, 2011
ISTANBUL – Hürriyet Daily News