Byblos share grabs ‘market-weight’

FFA estimates fair value of Byblos share at $1.9; expects annual profits to grow by 11 percent

August 9, 2011- FFA Private Bank rated the shares of Byblos Bank at ‘Market Weight’. It estimated the fair value of Byblos share price, over the near term, at $1.9. The rating implies a 21.6 percent upside as Byblos share closed at $1.66 on August 8.

FFA projected the Bank's profits to grow at an annual growth rate of 11 percent over the period 2010-2012. It expected the contribution of fees and commission income, which currently stands at 18 percent of total earnings, to gradually increase over time. According to FFA, Byblos Bank has the potential to generate more value for investors with the acceleration of its regional expansion strategy.

Chief Economist at Byblos Bank, Nassib Ghobril, said that the bank will maintain its expansion approach. He said that the bank will tap emerging markets and developing countries where the banking sector is underdeveloped and has favorable growth potential.

FFA said that Byblos’s Syrian affiliate did not see any deposit outflows, despite the political and security turmoil in Syria. According to Ghobril, Byblos’s conservative policy is paying off. “Our conservative approach represented in high liquidity and guarded lending policy is paying off… this was shown during the global financial crisis and now with the unrest in the Middle East,” he said.

Byblos Bank Syria has recently announced plans to increase its capital by SYP2 billion ($42 million) through the issuance of four million shares at a par value of SYP500 ($10.5) per share. After the increase, the Bank's capital will reach SYP6.12 billion ($129 million).

In January 2010, Syria passed a law allowing private banks to raise their capital to $200 million, from a previous capital of $30 million. Syria’s bid was to inject more funds into the private banking sector in order to promote economic reform, as well as finance development projects across the country.