EFG-Hermes Holding SAE, the biggest publicly traded Arab investment bank, agreed to acquire a 65 percent stake in Beirut-based Credit Libanais SAL for $542 million to expand in consumer and commercial banking. EFG-Hermes obtained an option to buy an additional 25 percent stake over the next two years on the same terms it will buy the 65 percent stake, the Cairo-based investment bank said in a Regulatory News Service statement. The acquisition values Credit Libanais at $834 million, the company said. The agreement “shows that the Lebanese banking sector remains an attractive destination for Arab and foreign institutional investors,” said Nassib Ghobril, head of research at Byblos Bank SAL in Beirut. “EFG Hermes did not intend to exit the Lebanese market when it sold its stake in Bank Audi, it was simply looking for a bank where it can acquire a majority stake,” he added. EFG-Hermes sold its stake on Jan. 18 in Banque Audi SAL- Audi Saradar Group, Lebanon's largest lender by assets, for $913 million after giving up on acquiring a bigger stake. Half was sold to a group of existing shareholders and other individuals, none of whom own more than 5 percent each of Bank Audi. EFG-Hermes, which has expanded its operations in recent years to countries including Syria and Saudi Arabia, will use its own cash for the acquisition and won't need external funding, the bank said. The bank has said it's seeking to expand into Libya, Morocco, Sub-Saharan Africa and Pakistan. Credit Libanais, founded in 1961, operates in Lebanon, Cyprus and Bahrain and has a representative office in Canada. The bank has $5 billion in deposits and a market share of about 5 percent in Lebanon, according to the release. Credit Libanais had net income of $36 million and almost $1.47 billion in net loans as of June 30, resulting in a loan- to-deposit ratio of 29 percent, EFG-Hermes added.
