Peace of Mind
AMEDA 11TH MEETING,
BEIRUT April 2010
Brief Introduction to BLOM Bank
The Development of the Custody Industry
Asset Management from Lebanon & MIDCLEAR
1
Leading Banking Group In Lebanon
 One of the oldest Bank , Largest and most profitable
 Universal banking model
Active in Corporate, Retail, Trade Finance, Private Banking, Investment Banking, Brokerage,
Asset Management, Islamic Banking and Insurance.
 Well positioned to capture regional growth
Present in KSA & Qatar (2009), Abu Dhabi (Rep. Office 2008), Egypt (2005), Jordan (2004),
Syria (2004) and UAE (Dubai & Sharjah since 1976).
 Wide presence in Europe
Present in France, UK, Switzerland, Cyprus and Romania
 Highest “Credit” Ratings
- The highest national score rating Aa1.Lb from Moody’s
- Rated by Capital Intelligence, a Middle East specialized rating agency, BBB-, which is
the highest financial strength rating in Lebanon
2
High Growth, Expanding Overseas
Total Deposits
Growth of Total Net Lending
($ in millions)
($ in millions)
CAGR: 16.4%
CAGR: 22.1%
17,968
6,215
7,686
9,033
10,161
11,731
13,737
15,108
3,481
2,772
996
2002
2003
2004
2005
2006
2007
2008
2009
2002
Branch International Expansion
1,376
1,411
1,670
2003
2004
2005
2009
55
47
28
2005
58
58 64
59
67
UAE
2.3%
Syria
5.3%
Lebanon
2007
2008
2006
2007
2008
2009
Egypt
6.0%
KSA
(1.4%)
Qatar
(0.7%)
Jordan
2.4%
37
2006
1,986
Breakdown of Net Income
No. of Branches
52
4,021
2009
Lebanon
80.3%
Europe
5.8%
Foreign Countries
BLOM Bank strategy is based on the expansion in the region and the diversification of its services to become
a leading regional bank while continuing to ensure Peace of Mind to its customers and stakeholders.
3
Wide Diversification in Business Lines and
Geographies
Corporate
Trade
Finance
Retail
Private
Banking
Investment
Banking
Brokerage
Islamic
Banking
Insurance
Asset Mgmt
Research
Lebanon






2006

2008

Syria


2007
2009
2006
Egypt


2006
2006
2009
Jordan


2004
UAE


Saudi Arabia
2010
Qatar

Europe


2010
2010
2010


: available business lines
Breakdown of Operating Income
Breakdown of Operating Income
2008
Investment &
Private
Banking
8.7%
Retail Banking
10.9%
Corporate &
Commercial
Banking
25.5%
2009
Insurance
3.1%
Liquidity*
51.8%
Investment &
Private
Banking
12.3%
Retail Banking
12.5%
Insurance
3.1%
Liquidity*
48.6%
Corporate &
Commercial
Banking
23.5%
* Liquidity represents Treasury Bills, CD’s, Bonds and deposits with banks.
4
Long Track Record of Consistent Profitability
BLOM has successfully delivered consistent annual net income growth
BLOM Net Income
($ in millions)
CAGR: 19.6%
180.3
205
251.6
293.2
2007
2008
2009
136.8
83.6
88.3
91.2
2002
2003
2004
2005
2006
Source :Company Data
5
Substantial and Growing Fee Income
Ratio of Fee Income to Operating Income
Fee Income
% of operating income
30.27%
145
115
79
75
2005
2006
20.70%
21.67%
23.50%
22.62%
2006
2007
2008
93
49
38
40
2002
2003
2004
2007
2008
2009
2003
2004
2005
2009
Source: Company Data
Source: Company Data
Fee Income Breakdown by Type
Fee Income Breakdown by Region
2009
2009
Insurance
5.7%
Europe
13.2%
UAE
3.6%
Corporate &
Commercial
Banking
39.2%
Lebanon
56.8%
Egypt
16.2%
Syria
7.8%
Source: Company Data
25.14%
23.78%
Jordan
2.4%
Investment &
Private Banking
46.0%
Source: Company Data
Retail
9.1%
6
The development of the Custody Industry
Clearing
The securities
market represents a large and growing part
Services
of financial Markets.
Lebanon
 Custody as an industry originated with investors needing
to keep security certificates in a safe place.
 In step with the growth of sophisticated financial markets,
The custody industry evolved into a complex industry no
longer characterised by physical safekeeping but by a range
of information and banking services
The development of the Custody Industry
Custodian Banks, Central Securities Depositary, International CSD
 Custodian Banks provide services related to settlement and Asset
Servicing ; it involves acting as an information intermediary,
communicating between issuers and securities holders. They have
developed economies of scale to service their customers.
When acting in multiple markets they are called global custodian.
 At the urging of national authorities and central banks, some markets
set up CSD to immobilise securities certificates. Advances in technology
enabled markets to dematerialise. Central Registrar as 1st service. Now
highly diverse services are proposed by CSD, they are the cornerstone
of any efficient settlement system, and supervised by national central
banks and security market authorities to prevent systemic risk. They
are required to avoid credit risk and abide by good governance.
 EUROCLEAR & CLEARSTREAM have a different business model
than CSD since they have been founded as for profit ventures by
commercial banks . They combine CSD functions and banking services
The development of the Custody Industry
Custody in the electronic age & Cross Border Custody Services
 Investors continue to use custodian for several reasons:
Ineligibility, Intermediation solution, functions are different in terms of
risk profile, the need to cope with non standardised activities with much
lower level of automation, and the need to to engage in activities
considered as high value added.
Specialised reporting and additional banking services
 Single market custodian
 Multi direct custodians
 Global Custodians
 Most CSD cover also securities deposited with other CSD with a
secondary listing. They offer a custody service in securities outside their
own markets either by appointing a multi single direct custodian bank as
sub-custodian, or by opening an account in other CSD which may or may
not involve the same membership rules that apply to MKT participants.
The development of the Custody Industry
Demand for Custody Services : Investors & Intermediaries
 Private Banking & Wealth Management customers
 Corporations
 Investment firms
 Institutional investors
 Brokers
 Global Custodians
 Asset Managers
 Medium to small sized Banks
 Issuers
The development of the Custody Industry
Challenges for the Custody Industry
 Diversity and increasing complexity of Assets
 Competition from CSD in Banking Services
 Regional challenges specific to the maturity of the industry
Asset Management from Lebanon & MIDCLEAR
 First Lebanese Fund using a Global Custodian Bank then
shifting to MIDCLEAR for Administration
 First Lebanese Fund investing in Jordan in cooperation
with MIDCLEAR and a Local Custodian Bank
 First Bahraini Fund investing in Lebanon and local
Custodian outsourcing its custody and administrative
activities with MIDCLEAR
 First Lebanese Fund investing in EGYPT and appointing
MIDCLEAR as Custodian and administrative Agent