Published: May 7, 2009
State-owned Libya Foreign Bank (LFB) plans to increase its capital 10-fold, from US$1bn to US$10bn, "in the next two to three years", according to the bank's chairman, Mohammad Bait-Elmal.
Speaking to reporters at the sidelines of a conference in Dubai, Bait-Elmal sketched out ambitious plans for the bank, which is taking advantage of an improvement in Libya's relations with the EU, and of a government rich with petro-dollars, to expand into international markets.
"We are going to have a new strategy because of the changes in the world," Bait-Elmal told reporters. "We would like to have participation in London, US, Paris, Rome."
"Our capital is US$1bn, we hope to get it up to US$10bn, that's our plan ... hopefully in the next two to three years", Bait-Elmal said. The bank is a provider of wholesale and retail services, is wholly-owned by the Libyan central bank, and operates solely outside of Libya, mainly in North African markets.
Last year, LFB teamed up with Libya's sovereign wealth fund to purchase a 4.2% stake in Italian bank UniCredit. The acquisition prompted the ever-diplomatic President Berlusconi to say he was "concerned" about takeovers of Italian companies by sovereign wealth funds.
The acquisition of more than 5% in UniCredit would need the approval of the Italian central bank, although Bait-Elmal said he had no plans to increase the stake in the Italian bank.
However, he did say LFB planned to buy out half of HSBC's 48% stake in British Arab Commercial Bank, a wholesale bank that specialises in trade finance in northern Africa and the Gulf.
"We will buy HSBC's shares ... they will go down to 19% and we will be buy the rest," Bait-Elmal said, adding it would also buy shares from other shareholders to take its stake above 70%. "We hope to have it by end of the year."
The bank is also looking to strengthen its operations in Chad, Burkina Faso, Togo, Algeria and Tunisia, and to move into eastern and southern Africa. "We don't have business there and it is booming," Bait-Elmal added.