editor's pickTuesday 04, September 2018
Salim Sfeir, Chairman and CEO of Bank of Beirut, shares how the bank has grown from strength to strength and where he sees the bank in a digitally enhanced future
How would you describe Bank of Beirut’s performance over the course of the year?
Real-time client, market and shareholder feedback has been consistently positive. Day-to-day validation is only one measure of our real-time economy. In banking, the long-term settles all debates. Key performance indicators were strong, producing increases in equity, deposits and dividends. One performance highlight in financial year 2017 was a 6.73 per cent year-on-year increase in assets. Even with this asset growth, we delivered a 1.15 per cent return on average assets (ROAA). When asked to consider our performance, we are our own harshest critics. As you would expect, we establish clear goals and examine performance, and this is implemented across the entire stakeholder spectrum to include customers, employees, communities, partners and shareholders. It’s the combination that shapes my vision for Bank of Beirut Group.
How has the bank helped in shaping the country’s financial landscape?
Twenty-five years ago, our intention was not to shape the country’s financial landscape. We acquired a five-branch Bank with a handful of employees. Our ambitions were enormous which entailed years of toil and no bank in Lebanon or the region has recorded the Bank of Beirut growth. Over the years, as we developed, we stayed true to classic, established values of trust and sound risk management. Consequently, by continuously strengthening our balance sheet, we contributed to Lebanon’s financial solidity. Through establishing a leadership position in trade finance, we supported Lebanon’s economy. Foreign remittances through Bank of Beirut have always been a valuable economic contributor. Through purposeful talent development, we remain committed to building a stronger financial community. Lebanon’s financial landscape is, of course, connected to the Central Bank of Lebanon, the local banking community and to macro-economic drivers. Lebanon’s Central Bank leadership and controls guide all member banks, including Bank of Beirut, to be accretive to the national economy. We are fortunate to be part of an excellent peer group, with all banks contributing positive value. In summary, I believe that keeping to the first principles of risk-managed banking is a cornerstone, shaping our local financial landscape.
The past 18 months have been an interesting period not only for Lebanon, but also the Middle East. What is your greatest worry about current market conditions?
Sluggishness is Lebanon’s major challenge. Our resilience has been examined and verified. Bank of Beirut’s resolve will continue through current obstacles and new tests are yet to be encountered.
Apart from the above, what are your concerns when navigating these conditions and do you see these challenges persist going into 2019?
Many countries are moving forward far more quickly, and are dealing more efficiently with unusual and less existential challenges. We cannot risk being left behind. Our technology infrastructure and our foundations in general are striving to cope. Our government needs to break free of the status quo. Most importantly is that as and when our infrastructure is reconstructed, we should be in a position to get ahead into the latest technologies more rapidly, at a much lower cost.
All banks in the region have embarked on a transformative digital journey. Can you tell us your vision for Bank of Beirut on the digital front? What is the most important aspect for you when it comes to digitalisation?
The most important aspect of our digital journey is equilibrium and steadiness. All initiatives offset best outcomes, risk management and cost effectiveness. The best outcomes, in turn, focus on three areas: channels to customer engagement; products and services; and operating efficiencies. Bank of Beirut’s omni-channel approach builds on decades of deep comprehension of our customers’ needs and how digital transformation could better serve them. This is an evolutionary process, rather than revolutionary. In products and services, we are committed to creating and delivering easyto- use financially effective options. Our new hybrid branch concept where online and offline generations can bank together, is an integrated physical and digital approach which retains the foundations of Bank of Beirut’s customer-centric tradition. In addition to our smart and hybrid branches, we have introduced satellites in remote areas, providing digital self-service account opening and loan applications through 24x7 videoconferencing. In our internal economic model, including back office processes, we have a continuous improvement cycle. As technology advances, some individual operating processes can be more radically transformative than others. But since we started from a sound base and have maintained pace with the markets, Bank of Beirut’s progress can be best described as “adaptable evolution”. It’s fair to say that the digital future has since arrived at Bank of Beirut.
How do you seek to grow the bank moving forward?
Strategically, we have been executing well on an ambitious, and until today, successful plan. Of course, we regularly assess new opportunities. Some years ago, we adopted the slogan ‘Banking Beyond Borders.’ Our intention to decorrelate and diversify in growing markets has already paid dividends, with approximately 50 per cent of our assets and income generated outside Lebanon. Much of our future growth will result from initiatives we have already approved and are starting to expand. Our international balance sheet can also grow. We are open to risk-mitigated opportunities in new markets. Time and due diligence will tell.
What is your outlook on the Lebanese banking sector? Where do you see opportunities?
The Association of Banks in Lebanon is entering a period of transformation, which I hope will substantially enhance the banking community’s contribution to the country’s financial well-being. Important conversations are taking place at this very moment. I am excited about the opportunity for the Association of Banks in Lebanon to better amplify, reflect and support the potential of our banking community. But if I were to add a note of caution, it will require an unyielding commitment to collectively transform the ABL. To all the questions you have raised there are three interwoven components; those combine the right vision, embedded with the right values, supported by transparent performance measurements. This is my vision. The best visions are realised when shared with good people. In this regard, I am reminded every day of how lucky I am to be surrounded by such a remarkable and skillful group of collaborators at Bank of Beirut.