The Phoenicians well over a millennium ago were known far and wide as an enterprising, seafaring civilisation never beset by boundaries. And the same applies today with their descendants in Lebanon, as much a global trading hub as it has always been.
In this issue, we report on a special BNY Mellon-hosted roundtable at which Cash & Trade sat down with a number of Lebanese banks to discuss the country’s current outlook.
As one delegate expressed it, “The Lebanese economy has always relied on activity beyond its borders – we focus not just on our local market but the bigger regional one – so recent upheavals have emphasised the importance of transparency in trade.”
Another added, “Banking potential in the region stems from the fact that we’ve got countries around us that literally need to be rebuilt from scratch. It’s a huge opportunity for Lebanese banks because we have an onshore presence in each and every one of these countries, so thanks to this and our long experience in dealing with sometimes volatile environments, we’re strategically positioned to capture these opportunities…
The point was also made that the Lebanese have traditionally always been “very active in triangular trade”, and its banking sector has been most accommodating in servicing its clients’ cross-border needs and supporting their expansion in regional markets.
Indeed this is borne out by the fact that Lebanese banks are monitoring Chinese activity in the MENA region and are considering Africa – where there is significant presence of the Lebanese diaspora – “the market of the future”.
On the subject of emerging economies, another article in this issue suggests that because there is a hope that they will drive global growth much more must be done to counter the lack of adequate (and affordable) levels of trade financing, especially where SMEs are concerned.
This is particularly troubling given that SMEs are often the economic backbone of markets around the world, be they OECD economies or frontier regions, and their trade financing need is seen as an issue that requires urgent commercial and political attention.
The author writes, “As the challenges are recognised and addressed, through a variety of initiatives ranging from education to advocacy, it is clear that a long-term, sustainable solution to addressing the trade finance gap, and to assuring adequate levels of trade-related financing resources in support of international development, requires new propositions.”
In our exclusive corporate interview another financing issue is touched on, albeit regarding well-established companies. In this case, a leading contractor calls for changes in the way banks cater for the requirements of major players in his sector.
Currently, he feels, there is no differentiation between the services that they offer his industry. He would like to see much greater diversity plus quicker decision making.
Finally, we note in our Tajara Monitor update that in 2014 trade finance and corporate banking enjoyed a robust year in the UAE with our 12 selected banks reporting overall record figures in trade-related contingent liabilities, corporate assets, liabilities, operating income and profit.
Corporate segment profit soared in that year to AED 12bn with Commercial Bank of Dubai gaining more positive momentum to show a 71 per cent increase to AED 792m; and Dubai Islamic Bank continued its momentum to breach the AED 1bn mark.
The full CMM UAE Tajara Monitor, giving a detailed analysis on a bank-by-bank basis, is available by subscription from Cash&Trade magazine.