The agreement was signed between IFC and Luxemburg-based, Byblos Invest Holding, Byblos’s major shareholder (owns 43 percent of Byblos) in December and has obtained approval from the Central Bank of Lebanon.

Alain Wanna, Byblos’s assistant general manager and chief financial officer (CFO), said that IFC entered Byblos as a shareholder because the bank is financially strong and making profits.

He said the step also demonstrates IFC’s interest to enter emerging markets where Byblos is already present like Syria, Iraq and Sudan.

Under the deal, Byblos Invest Holding will sell 47.6 million Byblos common shares to IFC at a price of $2.1 per common share, Byblos said.

The sale agreement is part of a plan by Byblos to raise its capital by $250 million before June 30, 2009 to finance acquisition of new banks in the future.

Wanna said that one of the targeted banks will be purchased by Byblos in the coming period. However, he refused to disclose the name of the bank but said that “it is a small bank and not based in the Arab region.” 

IFC will not participate in the capital hike but Byblos will use the proceeds of the transaction to subscribe to the planned capital increase which is still pending an approval from the Central Bank and the bank’s shareholders, it said.

Byblos Invest has agreed to vote in favor of the election of an IFC nominee as a board member of Byblos, the bank said.

Byblos Bank's net profits reached $146 million in 2009, up 20 percent from a year earlier while its assets hit $13.6 billion at December 31, 09, up 21 percent from the same period in 2008.

As part of its strategy to boost its presence and expand to new markets, the Bank also plans to open a branch in Congo soon.