Corporate Profile

Founded in 1830, the Bank was incorporated in its present form in 1962 as a private joint stock company with limited liability (société anonyme libanaise) with a duration of 99 years. The Bank is registered on the Beirut Commercial Registry under number 11347 and on the Lebanese List of Banks under number 56. In January 2014, the name of the Bank was changed from Bank Audi S.A.L. – Audi Saradar Group to Bank Audi S.A.L.

The initial shareholders of the Bank were members of the Audi family, together with certain Kuwaiti investors. Since 1983, the shareholder base has expanded and currently is comprised of more than 1,500 holders of Common Shares and Global Depositary Receipts (representing Common Shares). The Global Depositary Receipts evidencing the Common Shares are listed on both the Beirut Stock Exchange and the London Stock Exchange and the Bank’s Common Shares are listed on the Beirut Stock Exchange.

The Bank’s head office and registered address is Bank Audi Plaza, Omar Daouk Street, Bab Idriss, Beirut 2021 8102, P.O. Box: 11-2560, Beirut, Lebanon.

The Bank is a regional Bank. It operates principally in Lebanon, the MENA region and, since November 1, 2012, in Turkey, offering a full range of products and services that principally cover commercial and corporate banking, retail and personal banking and private banking, as well as ancillary activities such as investment banking and factoring. As at end-December 2016, the Bank ranked first among Lebanese banks in terms of total assets (LL 66,732 billion), shareholders’ equity (LL 5,575 billion), customers’ deposits (LL 54,203 billion), loans and advances (LL 25,951 billion) and net profits (LL 709 billion). In addition to its historic presence in Lebanon, Switzerland and France, the Group currently operates in Jordan, Egypt, Saudi Arabia, Qatar, Abu Dhabi (through a representative office), Monaco, Turkey and Iraq.

As at end-December 2016, the Bank had one of the largest branch networks in Lebanon, with 84 branches (80 operating) covering the Greater Beirut area and other strategic regions in Lebanon, as well as, through its foreign subsidiaries, a network of 117 branches in the MENAT region (outside of Lebanon), including 15 branches in Jordan, 43 in Egypt and 50 branches in Turkey. The Bank has two subsidiaries in Lebanon, two subsidiaries in Europe, as well as an asset management company in Monaco, four subsidiaries in the MENA region outside Lebanon and a subsidiary in Turkey.

Since 2005, the Bank has undertaken significant regional expansion and has the fourth largest coverage among the top 15 Arab banking institutions in the MENA region with operations in 10 countries, excluding Lebanon, through a network of branches and subsidiaries developed mainly through green-field operations. As a result of this regional expansion, an increasing percentage of the Bank’s assets are contributed by its operations outside Lebanon. Management intends to continue to seek growth opportunities both in Lebanon and abroad over the medium term.

As at End-December 2016, the Bank and its consolidated subsidiaries had 7,017 employees, including 3,331 persons employed in Lebanon, 1,680 persons employed at Odea Bank in Turkey and 1,463 persons employed at Bank Audi Egypt.
Principal Business Activities
Principal Business Activities

Corporate & Commercial Banking

The Bank has a strong commercial and corporate banking franchise with a diversified loan portfolio covering corporate clients in Lebanon, Turkey, the MENA region, Africa and Europe. Credit facilities are booked/managed at the levels of its headquarters in Lebanon and its subsidiaries in Turkey, Egypt, Jordan, Saudi Arabia, Qatar, France, Switzerland and Iraq. The Bank offers a wide range of traditional banking products and services to SMEs, as well as to larger corporate clients. These products and services generate both interest and fee-based income, with a focus on granting working capital and other loan products, providing services in areas such as collection, trade finance, performance bonds, guarantees, letters of credit and cash management, advising on international trade, providing correspondent banking and financial consulting services and preparing feasibility studies across a broad spectrum of industry sectors. As at December 2016, the Bank had a consolidated corporate loan portfolio of LBP 19,678 billion (US$ 13,053 billion), and the largest corporate loan portfolio among Lebanese banks.

Retail Banking

The Bank offers a full range of retail products and services, including conventional checking and savings accounts, fixed-term deposits, loans and residential mortgages, credit cards, bancassurance products and internet banking, as well as a host of innovative retail products and services developed in association with leading partners.
As at December 31, 2016, the Bank offered more than 150 retail products and services to more than 1.3 million retail clients inside and outside of Lebanon. Retail banking activity is supported by the Group’s more than 450 advanced ATMs and more than 180 branches.
The Bank’s dynamic customer-focus approach, which aims at enhancing the customer penetration rate with existing products in addition to enlarging the core product offering with the launch of new products, translated into the Bank’s cross-selling activities to a total of 4.4 products per customer as at September 2016.
Consolidated loans in the retail banking segment, when consolidated in US$, have sustained the same level of previous year as at December 31, 2016. If we exclude the impact of currency devaluation, consolidated retail portfolio would register a year-on-year growth of 14.6%.

Private Banking

Bank Audi Private Bank is the wealth management arm of Audi Group. It operates through three main booking centers based in Switzerland, Lebanon and Saudi Arabia, with offices in Monaco, Qatar, Jordan and the United Arab Emirates. Deep-rooted in the Middle East and North Africa (MENA) region, Bank Audi Private Bank’s leading position sets its apart from its peers and is of significant value for clients seeking investment knowledge and expertise in the region.
The Private Bank has a committed and long-standing history of serving its ever-growing client base since 1976, the year Banque Audi (Suisse) sa was established in Switzerland.
The Bank adopted the Group’s corporate governance and values which have been and will remain a cornerstone of its expansion and modernization. It recognizes the importance of sound Corporate Governance for business success and has therefore established a set of guidelines to increase its long-term value.
Bank Audi Private Bank offers a full and diversified range of services to high net worth clients, with full access to major markets worldwide and global investment products, including discretionary portfolio management, investment advisory, trade execution in all asset classes, Lombard credit, and other private banking services such as estate planning, fiduciary deposits, safe custody and credit cards.
As at September 30th, 2016, on a consolidated basis, the Bank had assets under management, custody accounts and fiduciary deposits of LL 16,742 billion (USD 11,106 million).

Investment Banking & Capital Markets

The Bank offers capital markets and investment banking products and services, including securities trading activities. The Bank is leveraging its regional presence to further develop its securities services and brokerage platform, consolidating the business towards increased intra-group synergies.
Since 1996, the Bank has developed a substantial capital markets franchise. In Lebanon, the Bank is a market maker on the Beirut Stock Exchange and, as at December 31, 2015, had a 17.75% market share of Beirut Stock Exchange equities trading volumes by value. The Bank also has a significant share of the Government Eurobond and treasury notes markets, with an annual trading volume exceeding U.S.$11.5 billion in 2015. The Bank is also active in the equities markets, with a particular focus on Saudi Arabia and Egypt, as well as in fixed income markets. In Lebanon and the MENA region, the Bank’s activities are supported by the Bank’s sovereign, fixed income and corporate research coverage businesses.
Through the Bank’s institutional fixed income desk, which was established in 2012, the Bank continues to develop and maintain new and existing coverage of Lebanese securities for international non-bank financial institutions in order to cater to international appetite for higher yielding instruments.
In December 2016, on a consolidated basis, the Bank’s investment banking and capital markets activities generated total income of LL 1,723 billion (U.S.$ 1 143 million) as compared to LL 620 billion (U.S.$412 million) in December 2015.

Competitive Strengths

As a result of the Bank’s restructuring and expansion program, which has been on-going since 2005, the Bank has significantly reinforced its presence in Lebanon, throughout the MENA region and in Turkey, as well as diversified the range of its products and services to cover all the activities traditionally carried out by a universal bank. In particular, the Bank believes that it benefits from:
  • a strong franchise in commercial banking activities, with a diversified loan portfolio, including borrowers comprising leading enterprises in Lebanon, as well as a number of leading corporates from the MENA region and Turkey;
  • a strong franchise in retail banking, with a full range of retail products and services offered in the countries in which the Bank has retail banking operations;
  • a leading position in private banking, servicing the needs of high net-worth individuals through its subsidiaries in Switzerland, Monaco, Lebanon, Qatar and Saudi Arabia and its representative office in the United Arab Emirates;
  • a leading position in domestic and regional capital markets activities;

Over the last decade, Bank Audi has successfully expanded in the MENA region, achieving a sound and steady growth, and delivering a solid financial performance. Consolidated assets reported a CAGR of 15.12%, moving from USD 7.1 billion at end-December 2003 to USD 44.34 billion at end-December 2016, with net profits reporting a CAGR of 18.1%. This performance bears witness to the Group’s strong resilience against adverse developments including, most importantly, the 2008 financial crisis and the 2011 Arab uprisings. A key turning point was, in November 2012, the launching of the Group’s activity in the Turkish market after having obtained the first banking license granted by the Turkish authorities in more than 14 years. Since then, in just 4 years of activity, the Group succeeded in building USD 11 billion of assets in Turkey (driven by USD 8 billion of customers’ deposits), ranking the subsidiary 9th among 31 operating private commercial banks.

In parallel with this business performance, and over the same period, the Group’s governance practices have also evolved, in line with the evolution of international best practice, to accompany the expansion plan with effective independent controls and risk-based oversight by the Board and its committees.

Today, the Group continues to shape itself as a large regional bank in the MENAT region with Corporate and Commercial, Retail and Private Banking being its main business lines. The Group’s main strategic orientations evolve around the following main development pillars:

Bank Audi’s roots in its home market go back to 1830, underscoring 186 years of banking history and experience. Today, the Bank has the most universal banking profile among peers with dominant domestic market shares, supported by one of the largest branch networks (83 branches) in the country. Bank Audi banks with the top 100 corporates with dominant corporate and commercial loans market shares. In retail banking, Bank Audi has the largest retail accounts portfolio, with an 18% market share (more than 50,000 accounts in a country with around 800,000 households), supported by innovative technologies, products and services. The Bank is also the principal market maker in Lebanon with an annual turnover of more than USD 11 billion on fixed income securities in Lebanon and the GCC. In addition, it holds, through its brokerage activities, an important market share in equity trading at the Beirut Stock Exchange.

Going forward, Lebanon will remain a pivotal part of the Group’s overall activity. The Bank therefore seeks to reinforce and consolidate its leading position on the local market. In particular, it will leverage on existing corporate relationships to grow its Commercial Banking business, and boost its SME proposition to become a major business line.

Over the last years, from end-December 2010 to end-December 2016, and despite the many turnarounds and setbacks of the Egyptian environment, Bank Audi Egypt has reported a total assets’ CAGR of 23% and a net profits’ CAGR of 32%, outpacing peers. The Bank has also adopted sound credit policies focusing solely on defensive businesses translating into an NPLs ratio of 1.4%, well below the sector’s average. Going forward, the Bank will continue to build a resilient franchise in Egypt by expanding its branch network and extending the scope of products and services to cover new business segments such as Islamic Finance, mass affluent, mortgages and others.

In 2012, Bank Audi became the first financial institution in 14 years to be granted a banking license by the Banking Regulation and Supervision Agency (BRSA) in Turkey. In the same year, the Bank established Odea Bank, its affiliate in Turkey. Since the launch of operations, Odea Bank has successfully established a leading challenger bank franchise in the Turkish market, with a universal banking model and market leading productivity levels. Therefore, in almost 3 and a half years of average activity, Odea Bank has successfully built up USD 11 billion in total assets, USD 8.2 billion in customers’ deposits, and USD 7.4 billion in loans to customers. This translates into Odea Bank having a 1.3% market share in assets, 1.8% in customers’ deposits, and 1.4% in net loans, respectively, ranking 9th amongst non-state owned conventional banks (in terms of assets and loans).

Within the prevailing environment, Odea Bank aims to consolidate its position as challenger Bank in the Turkish market, while optimizing efficiency and profitability. Furthermore, the Bank intends to leverage the Group’s wide regional footprint to grasp cross-border opportunities that would allow Odea Bank to become the first Turkish bank to cover the MENA region.

With over 37 years of presence in Switzerland where the Group holds the second largest Arab private bank in terms of AuMs, the Private Banking business line is one of the strategic key development pillars of the Group, alongside its three key geographies (Lebanon, Turkey, and Egypt). In addition to Banque Audi (Suisse), it operates through 3 main subsidiaries in Lebanon, Saudi Arabia and Qatar, with additional offices in Monaco, Jordan and Abu Dhabi.

Following the successful implementation of a revised business model aiming at improving intergroup synergies and efficiencies, the Private Banking net profits reached USD 54.6 million in 2016. Consolidated AuMs and custody accounts reached USD 10.8 billion at end-December 2016, a level which compares competitively with portfolios managed by regional banks.

Based on the above, the Bank aims to optimize the Private Banking business line by reinforcing intra-Group synergies, so as to ensure a higher growth momentum.

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