The European Bank for Reconstruction and Development (EBRD) has made a 2.51 percent equity investment in Lebanon’s Bank Audi, the EBRD’s first investment in Lebanon, Audi said. The EBRD, a multilateral development bank, said the investment in Lebanon’s largest bank aims to support Lebanese financial markets, influence the broader economy and strengthen the financial sector.
Lebanon has one of the world’s most indebted governments measured against the size of its economy.
Growth has been slowed by war in neighbouring Syria and years of political inertia.
“The Lebanese financial sector is the backbone of the country’s economic stability and international reputation. Supporting Bank Audi’s operations and corporate governance is crucial in maintaining its resilience in the challenging environment in the region,” EBRD President Suma Chakrabarti said in a prepared statement.
The EBRD began work in Lebanon in 2017. It has said it wants to support the country’s private-sector competitiveness, promote sustainable energy and energy reform, and improve delivery of public services.
“This investment in Bank Audi helps send a positive signal on the growth potential of the local economy,” Audi Chairman and Group CEO Samir Hanna said. The EBRD will acquire common ordinary shares of Bank Audi listed on the Beirut Stock Exchange, about 2.51 percent of Bank Audi’s total common shares outstanding, the statement said.
Audi and the EBRD have worked together previously in Audi’s Egyptian and Turkish units on supporting small and medium-sized enterprises and trade. The EBRD also announced it will sign a $50 million trade finance line with Lebanon’s third-largest lender, Fransabank.
Fransabank will become the first bank under the EBRD’s Trade Facilitation Programme in Lebanon, which aims to support international and intra-regional trade by providing guarantees and cash advances for import, export and local distribution of imported goods.