Joined: 05 Oct 2005
Posts: 315
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TRIPOLI — Libyan financial authorities have decided to merge two of the country’s main banks, Libya’s central bank said yesterday, as part of a drive to reform its antiquated banking system.
Al Oumma (Nation) Bank, Libya’s biggest state-owned bank in terms of assets, and al Joumhouriya (Republic) Bank, the fifth-largest state-owned bank, would form a single bank with combined assets of $65bn. “The merger is part of a strategy being implemented by the central bank to restructure, develop and modernise the banking sector with the aim of improving banking services,” the central bank said. The merger operation would be completed early next year when the yet-to-be named future bank would have a network of 143 branches employing 5800 people. “The bank will be one of the 10 biggest banks in North Africa,” the bank said. The future bank would float an unspecified stake on Libya’s nascent stock market as part of “efforts to strengthen the state sector and give citizens and state-owned companies the opportunity to benefit from the country’s wealth and the economy’s growth,” it said. Libya, with a population of 5- million and the biggest holder of oil reserves in Africa, is moving to modernise its banks. But it faces an uphill task in a command economy where cash is king, companies struggle to get credit and reforms can fall prey to influential opponents. In July, the Libyan government selected BNP Paribas as strategic partner for Sahara Bank in the first partial privatisation deal for the country, the central bank said. It said that BNP Paribas had offered € 145m for a 19% stake, valuing the bank at 3,6 times its current book value. BNP Paribas will get management control and has the right to increase its stake to 51% in three to five years. Reuters |
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