Arab Bank Plans Return to Libya After Uprising Forces Exit

Arab Bank Plc. (ARBK), Jordan’s largest lender, is seeking to regain access to its Al Wahda bank unit in Libya after last year’s uprising forced it to exit the country.

“As a result of the events which took place in Libya, we have not been involved in the management of Al Wahda bank since early 2011,” Arab Bank Chairman Sabih Al Masri wrote in an e- mailed response to questions to Bloomberg on Sept. 6. “We hope to be in a position to discuss with the new authorities in Libya how we might reengage our presence in the country.”

Amman-based Arab Bank owns 19 percent of Al Wahda, with more than 70 branches across Libya, and has the right to increase that stake to 51 percent, Al Masri said. He took over management of Arab bank on Aug. 26 after former chairman Abdul Hamid Shoman resigned because of differences with the board.

Former Libyan ruler Muammar Qaddafi was killed in October after an eight-month uprising that left thousands dead, one of a series of uprisings against Middle Eastern dictators known as the Arab Spring. The country’s new interim legislature elected Mohammed Yussef Magariaf, leader of the National Front Party, as its head last month as the country rebuilds.

The bank is also studying a possible return to Iraq after the nationalization of its branches in 1964, Al Masri said.

“Given the potential of the Iraqi market, it is natural that at some stage we would study the feasibility of reentering,” he wrote. The bank is present in all Arab countries with the exception of Iraq and Kuwait, he said.

Established in Jerusalem

Arab Bank, established in Jerusalem in 1930 and the first public shareholding company on the Amman stock exchange in 1978, posted net income of $360.3 million for the first half, a 10 percent increase compared with the year earlier period, he said.

Arab Bank fell 0.6 percent to 7.15 Jordanian dinars as of 1:05 p.m. in Amman.

Kuwait-based Al-Rai newspaper reported Aug. 23 that unidentified Qatari investors were in talks to buy a 20.7 percent stake in Arab Bank, controlled by Lebanese former prime minister Saad Hariri through Saudi Oger Ltd., Oger Middle East Holding and BankMed SAL. The report prompted the stock to surge the most in three months on the day, gaining 5 percent.

Arab Bank headquarters will remain in Jordan and the lender has no plans to reduce its workforce or change positions, Masri told a news conference in Amman three days later.

Source: Bloomberg 

Libya eyes refund of Goldman, SocGen losses

The Libyan sovereign wealth fund is investigating investment losses of $1.75 billion on structured products managed by Goldman Sachs (GS.N) and Societe Generale (SOGN.PA) to see whether it can claim compensation, the fund's chairman said on Wednesday.

Mohsen Derregia, chairman of the Libyan Investment Authority (LIA), told reporters in Milan that the LIA needed to review these investments and how they were managed.

"These were investments made in 2007 to 2008, and some of those losses are quite surprising. We've had losses for around $1.75 billion, of which $900 million was on a single investment with Goldman Sachs," Derregia said.

"We will have to see how these structured products were created, valued and managed. Then we will talk to the investment houses and see if we can claim a refund."

Asked what kind of structured products were involved, Derregia said: "It's not clear to me."

Goldman Sachs declined to comment and Societe Generale could not immediately be reached for comment.

Derregia was appointed head of the LIA in April and is sifting through tens of billions of dollars in holdings and investments made by the fund worldwide during the regime of Muammar Gaddafi, which was overthrown last year.

"To have a clear oversight of everything will take time; it won't be done in one or two months," Derregia said. "Clearly, there will have to be some write-offs, although they are not huge."

The total value of assets managed by the LIA (about $60 billion) had fallen by less than the LIA feared, Derregia added. "It's now midway between $50 billion and $60 billion. People in Libya feared we had lost 50 percent of our assets. It's not like that."

ASSETS SEIZED

Derregia was in Italy to speak to authorities and the financial community about the LIA's holdings in the country, which were seized in March by Italian financial police on the grounds that they belonged to members of the Gaddafi family.

The holdings, worth about 1.1 billion euros ($1.39 billion), include stakes in Italy's largest bank by assets, UniCredit (CRDI.MI), the oil and gas giant Eni (ENI.MI) and carmaker Fiat (FIA.MI).

The LIA has appealed against the seizure, saying that those holdings belong to the LIA, held on behalf of the Libyan government. Derregia and his lawyers said this view was backed by the Italian economy ministry's Committee of Financial Security, which he met on Tuesday.

The next hearing in the case is on July 12.

Derregia said that the LIA would keep its 1.8 percent stake in UniCredit and could buy more shares in the bank if this was in its own interest.

He said it would not make sense to sell down its Italian portfolio now, given current market conditions. "Clearly the value of the shares has declined substantially. There is no incentive for us to sell the shares now or in the foreseeable future."

Asked whether the fund would buy Italian government bonds battered by the euro zone debt crisis, he said: "We hold a lot of assets denominated in euros, and we already have enough bonds."

Source: Reuters