BLOM Bank shares
yield highest dividend

Audi raises dividend for

the first time in recent years

BLOM Bank’s common shares have yielded 8.9 percent in dividends for the fiscal year 2016, the highest among listed banks.

BLOM was followed by Bank Audi with a dividend yield of 8.3 percent and Byblos Bank with a yield of eight percent. The dividend yields on the common shares of Bank of Beirut and Banque BEMO were 3.5 percent and 3.1 percent respectively.

“Our strategy is to pay a dividend that is not less than the previous dividend payout,” said Alexandre Mouradian, head of Investor Relations at BLOM Bank.

He said the bank does not need to reinvest its profits at present as it has enough capital. Its capital adequacy ratio, which is among the highest in the country, is currently at 18.5 percent.

Last month, BLOM Bank redeemed its 20 million preferred shares which decreased its total shareholder’s equity by $200 million.

Mouradian said BLOM also follows a strategy of high profit growth and low operation costs which results in a low cost-to-income ratio of 34 percent.

According to the report ‘Equity Research - Lebanese Banks’, released by FFA Private Bank in April, Blom Bank’s higher returns and solid liquidity and capitalization levels reflect “a prudent management team and highlight the bank’s ability to propose higher dividends on account of lower than average payouts and excess capital buffers.”

	Share Price/June 2017	Dividend	Dividend Yield
BLOM Bank	11.2	1.00	8.9%
Bank Audi	6	0.50	8.3%
Byblos Bank	1.66	0.13	8.0%
Bank of Beirut	18.8	0.66	3.5%
Banque BEMO	1.7	0.05	3.1%

Source: InfoPro, Beirut Stock Exchange

Bank Audi used to pay a constant dividend of $0.4 per share before increasing it for fiscal year 2016 to $0.5, but Byblos Bank is still following a policy of paying a dividend of $0.13. Audi’s consolidated net profit increased 17 percent to $470 million in 2016. Last year, the bank had the lion’s share of the swap operations engineered by the Central Bank.

Although Bank of Beirut has been increasing the value of its dividends over the years, its dividend remains too low compared with the market price of its common share.

FFA said in its report: “We believe banks offer an attractive entry point for investors particularly as Bank Audi and BLOM Bank shares gave back gains after dividend payment in April 2017 as they provide double digit total returns given favorable dividend yields and trading multiples at discount to our target price and historical averages on a price-to-book ratio (P/B) basis.”