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Fransabank to open Islamic bank in Sudan

سودانيزاونلاين.كوم
sudaneseonline.com
10/25/2005 8:59pm


By Will Rasmussen
Daily Star staff



BEIRUT: Fransabank, Lebanon's fifth largest in terms of assets and deposits, will open an Islamic bank in Sudan with capital of $26.3 million in January as part of a regional expansion, its general manager said. The bank also announced on Monday that it received permits to open subsidiaries in Syria and Algeria. "With our partners in the Gulf we are in the process of establishing Capital Bank Sudan which will focus on investment banking," Mansour Bteish said in an interview with The Daily Star.

In a deal signed last June, Fransabank and Kuwait's AREF Investment Group will each control a 20 percent stake in Capital Bank Sudan with the remaining shares owned by Kuwaiti and Egyptian investors. AREF is part-owned by Kuwait Finance House, the only Islamic bank operating in Kuwait.

"This is our first time in Islamic banking," Bteish said. "The expertise for this is coming from our partners in Kuwait and the banking expertise is coming from Fransabank."

Bteish said the bank will invest in Sudan's "productive sector" but did not give further details. He said the bank's shareholders will meet in November to discuss specific investment projects. The bank will open with a branch in Khartoum and may expand to other cities and offer retail and commercial banking, Bteish said.

With a power-sharing agreement in place aimed at ending Africa's longest war, Sudan's oil-fueled economy is luring Gulf investors hoping to cash in on a postwar recovery.

"Sudan is offering huge potential with the return of peace," Bteish said.

With $70 billion in assets - or more than three times the country's GDP - Lebanese banks are rushing to enter new markets. BLOM, Lebanon's largest bank, is bidding to take over Misr Romanian, a mid-sized Egyptian bank. Byblos Bank announced last week that it is seeking to buy a majority stake in a small Algerian bank.

Bteish also said Fransabank is in the process of opening subsidiaries in Syria and Algeria.

Fransabank will own a 68 percent share of Fransabank Algeria, which will begin corporate and retail banking in the spring of 2006. The Lebanese-owned container shipping giant CMA-CGM has a 25 percent stake in the new bank.

"We got authorization from the Central Bank in Algeria last week and expect to start in April or May," Bteish said. "We will start in Algiers and in the next few months open branches in two or three of the main cities."

Algeria's three state-owned banks - which the government says that it intends to privatize - control over 50 percent of the market.

"They're opening up the market in Algeria and there's a lot of potential there," Bteish later added.

Fransabank also won preliminary approval in early October from the Central Bank of Syria to open a subsidiary there, making it the sixth Lebanese bank to enter the Syrian market. Syria opened its previously state-controlled economy to private banks in 2002 and recently reformed its banking sector, ending restrictions on transferring profits outside the country, and lowering fees on financial transactions. Bteish said Fransabank's Syrian subsidiary, which will offer retail and corporate banking, will open in Damascus with $35 million in capital and will then expand to Syria's other major cities. Fransabank will own a 49 percent stake in the bank, with rest controlled by Syrian nationals, as required by Syrian law.

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