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Peace of Mind. 1 Brief Introduction to BLOM Bank Asset Management from Lebanon & MIDCLEAR The Development of the Custody Industry AMEDA 11 TH MEETING,

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Presentation on theme: "Peace of Mind. 1 Brief Introduction to BLOM Bank Asset Management from Lebanon & MIDCLEAR The Development of the Custody Industry AMEDA 11 TH MEETING,"— Presentation transcript:

1 Peace of Mind

2 1 Brief Introduction to BLOM Bank Asset Management from Lebanon & MIDCLEAR The Development of the Custody Industry AMEDA 11 TH MEETING, BEIRUT April 2010

3 2 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 Moodys -Rated by Capital Intelligence, a Middle East specialized rating agency, BBB-, which is the highest financial strength rating in Lebanon Leading Banking Group In Lebanon

4 3 Total Deposits Branch International Expansion High Growth, Expanding Overseas 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. No. of Branches Growth of Total Net Lending Breakdown of Net Income 2009 CAGR: 16.4% ($ in millions) CAGR: 22.1%

5 4 : available business lines Corporate Trade Finance Retail Private Banking Investment Banking Brokerage Islamic Banking InsuranceAsset MgmtResearch Lebanon Syria Egypt Jordan 2004 UAE Saudi Arabia 2010 Qatar 2010 Europe Wide Diversification in Business Lines and Geographies Breakdown of Operating Income 2008 * Liquidity represents Treasury Bills, CDs, Bonds and deposits with banks. Breakdown of Operating Income 2009

6 BLOM has successfully delivered consistent annual net income growth BLOM Net Income ($ in millions) Source :Company Data Long Track Record of Consistent Profitability 5 CAGR: 19.6%

7 6 Ratio of Fee Income to Operating Income Fee Income Breakdown by Type Fee Income Breakdown by Region Substantial and Growing Fee Income % of operating income Fee Income Source: Company Data 2009 CAGR: 21.0% 2009

8 The development of the Custody Industry Clearing Services Lebanon The securities market represents a large and growing part of financial Markets. 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

9 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 1 st 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

10 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.

11 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

12 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

13 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


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