Comprehensive Situational Analysis of Bankmed, Fall 2017, USJ-ISEB M1
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This report presents a comprehensive situational analysis of Bankmed, a prominent Lebanese bank, examining its operations and financial standing. The analysis employs several strategic tools, including Porter's Five Forces to assess the competitive landscape, the 5 C's analysis to evaluate the company's internal and external environment, and the McKinsey 7-S framework to assess organizational effectiveness. A SWOT analysis is also included to identify the bank's strengths, weaknesses, opportunities, and threats. The report provides an overview of Bankmed's history, product lines, financial highlights from 2012 to 2016, and strategic initiatives. It delves into the political, economic, socio-cultural, and technological factors influencing the bank's performance. The report also assesses the competitive rivalry within the Lebanese banking sector, concluding with an in-depth evaluation of Bankmed's current position and strategic outlook. The report was prepared for a course at USJ-ISEB M1 in Fall 2017.
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Situational Analysis of bankmed
Prepared by: Rim T. Ghandour
To: Professor Tony Jbeily
USJ-ISEB M1
Fall 2017
Prepared by: Rim T. Ghandour
To: Professor Tony Jbeily
USJ-ISEB M1
Fall 2017
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Contents
1. Introduction............................................................................................................................2
2. Porter 5 forces analysis...........................................................................................................4
2.1. Threat of New Entrants.......................................................................................................4
2.2. Power of Suppliers..............................................................................................................4
2.3. Power of Buyers..................................................................................................................4
2.4. Availability of Substitutes...................................................................................................5
2.5. Competitive Rivalry.............................................................................................................5
3. Bankmed 5 C’S Analysis..........................................................................................................6
3.1. Company.............................................................................................................................6
3.1.1. Profile.............................................................................................................................6
3.1.2. Financial highlights.........................................................................................................7
3.1.3. About Bankmed..............................................................................................................8
3.1.4. Product line...................................................................................................................10
3.2. Bankmed Expansion & Collaboration................................................................................12
3.3. Customers.........................................................................................................................15
3.4. Climate: PEST....................................................................................................................16
3.4.1. Political factors.............................................................................................................16
3.4.2. Economic factors...........................................................................................................17
3.4.3. Socio-cultural factors....................................................................................................18
3.4.4. Technological factors....................................................................................................19
3.5. Competitors......................................................................................................................20
4. The McKinsey 7-S..................................................................................................................21
4.1. Structure...........................................................................................................................21
4.1.1. Board of directors.........................................................................................................22
4.1.2. The Board Committees.................................................................................................23
4.1.3. Sound governance........................................................................................................24
4.2. System..............................................................................................................................24
4.3. Strategies..........................................................................................................................25
4.4. Skills..................................................................................................................................25
4.5. Style..................................................................................................................................25
1. Introduction............................................................................................................................2
2. Porter 5 forces analysis...........................................................................................................4
2.1. Threat of New Entrants.......................................................................................................4
2.2. Power of Suppliers..............................................................................................................4
2.3. Power of Buyers..................................................................................................................4
2.4. Availability of Substitutes...................................................................................................5
2.5. Competitive Rivalry.............................................................................................................5
3. Bankmed 5 C’S Analysis..........................................................................................................6
3.1. Company.............................................................................................................................6
3.1.1. Profile.............................................................................................................................6
3.1.2. Financial highlights.........................................................................................................7
3.1.3. About Bankmed..............................................................................................................8
3.1.4. Product line...................................................................................................................10
3.2. Bankmed Expansion & Collaboration................................................................................12
3.3. Customers.........................................................................................................................15
3.4. Climate: PEST....................................................................................................................16
3.4.1. Political factors.............................................................................................................16
3.4.2. Economic factors...........................................................................................................17
3.4.3. Socio-cultural factors....................................................................................................18
3.4.4. Technological factors....................................................................................................19
3.5. Competitors......................................................................................................................20
4. The McKinsey 7-S..................................................................................................................21
4.1. Structure...........................................................................................................................21
4.1.1. Board of directors.........................................................................................................22
4.1.2. The Board Committees.................................................................................................23
4.1.3. Sound governance........................................................................................................24
4.2. System..............................................................................................................................24
4.3. Strategies..........................................................................................................................25
4.4. Skills..................................................................................................................................25
4.5. Style..................................................................................................................................25
4.6. Staff...................................................................................................................................26
4.7. Shared values....................................................................................................................26
5. SWOT Analysis......................................................................................................................28
5.1. Strengths...........................................................................................................................29
5.2. Weaknesses......................................................................................................................30
5.3. Opportunities....................................................................................................................31
5.4. Threats..............................................................................................................................31
4.7. Shared values....................................................................................................................26
5. SWOT Analysis......................................................................................................................28
5.1. Strengths...........................................................................................................................29
5.2. Weaknesses......................................................................................................................30
5.3. Opportunities....................................................................................................................31
5.4. Threats..............................................................................................................................31
1. Introduction
The Lebanese banking sector, financially sound and stable, plays a major
instrumental role in sustaining Lebanon's economic stability and prompting its
economy forward.
Representing 340 percent of Lebanon GDP, the banking sector is by far the most
important sector of the Lebanese economy.
Besides contributing the most to the GDP, the employment and the growth, it
continues to meet the financial needs of the economy, lending both private and
public sectors'.
It's important to precise that banks and other financial institutions in Lebanon are
under the jurisdiction of the Bank of Lebanon (BDL).
BDL's total reserves including gold, reached USD 55.9 billion. Its assets reached
117 billion with USD 11.9 billion in gold reserves as at end-September 2017.
Being the country's central bank, it is the bank regulatory authority, controlling
entries into the banking industry, defining the scope of banking activities and
setting prudential regulations and code of practice for banks.
Beside of BDL is the Banking control commission (BCC), who is responsible for
the supervision of banking activities by ensuring compliance with various
financial and banking rules and regulations. Banking activities are also subject to
both the Code of Commerce and the Code of Money and Credit.
Moreover, banks enlisted by the list of banks set up by BDL can be part of the
association of banks in Lebanon (ABL).
This association has important objectives such as strengthening the cooperation
of its member banks, representing them and defending collectively their interest
by working with the concerned authorities to find and develop the regulations and
promulgate the legislations. Also by enhancing the banking performance level
through improving the competences of its human resources and most importantly
reflecting a positive picture of the banking sector highlighting its fundamental role
in upholding the national economy.
The Lebanese banking sector, financially sound and stable, plays a major
instrumental role in sustaining Lebanon's economic stability and prompting its
economy forward.
Representing 340 percent of Lebanon GDP, the banking sector is by far the most
important sector of the Lebanese economy.
Besides contributing the most to the GDP, the employment and the growth, it
continues to meet the financial needs of the economy, lending both private and
public sectors'.
It's important to precise that banks and other financial institutions in Lebanon are
under the jurisdiction of the Bank of Lebanon (BDL).
BDL's total reserves including gold, reached USD 55.9 billion. Its assets reached
117 billion with USD 11.9 billion in gold reserves as at end-September 2017.
Being the country's central bank, it is the bank regulatory authority, controlling
entries into the banking industry, defining the scope of banking activities and
setting prudential regulations and code of practice for banks.
Beside of BDL is the Banking control commission (BCC), who is responsible for
the supervision of banking activities by ensuring compliance with various
financial and banking rules and regulations. Banking activities are also subject to
both the Code of Commerce and the Code of Money and Credit.
Moreover, banks enlisted by the list of banks set up by BDL can be part of the
association of banks in Lebanon (ABL).
This association has important objectives such as strengthening the cooperation
of its member banks, representing them and defending collectively their interest
by working with the concerned authorities to find and develop the regulations and
promulgate the legislations. Also by enhancing the banking performance level
through improving the competences of its human resources and most importantly
reflecting a positive picture of the banking sector highlighting its fundamental role
in upholding the national economy.
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Over the past decade, the Lebanese banking sector witnessed several
transformations, moving from a highly fragmented market to a somewhat
consolidated environment thanks to the central bank high requirements and
restrictions regarding the yearly opening of new branches.
Given that the Lebanese sector is overbanked, and due to the restrictions set by
the Central Bank, we believe that there is a room for a much more consolidated
environment reached through the acquisition of local banks by well-capitalized
large banking groups.
It’s important to share that the implementation of a strategic management system
is crucial to the survival of all organizations.
In the following situational analysis of Bankmed, we will intend to build a study of
the organization using many powerful tools to determine its current situation and
to help us propose consolidation and improvement actions.
transformations, moving from a highly fragmented market to a somewhat
consolidated environment thanks to the central bank high requirements and
restrictions regarding the yearly opening of new branches.
Given that the Lebanese sector is overbanked, and due to the restrictions set by
the Central Bank, we believe that there is a room for a much more consolidated
environment reached through the acquisition of local banks by well-capitalized
large banking groups.
It’s important to share that the implementation of a strategic management system
is crucial to the survival of all organizations.
In the following situational analysis of Bankmed, we will intend to build a study of
the organization using many powerful tools to determine its current situation and
to help us propose consolidation and improvement actions.
2. Porter 5 forces analysis
2.1. Threat of New Entrants
The biggest barrier of entry for the banking industry is trust, because the industry
deals with others money so people are more willing to place their trust with a well
known bank not with a new bank.
Also there are other factors such as the strict regulations and the international
compliance. To conclude, the barriers to entry are high for the banking industry.
2.2. Power of Suppliers
The primary resource of any bank is the capital. By this capital banks are able to
successfully respond to their customers borrowing needs while maintaining
enough liquidly and capital to meet withdrawal expectations.
There are four major suppliers of capital in the banking industry: Customer
deposits, mortgages and loans, mortgages-baked securities, loans from other
financial institutions. The power of supplier is based on the market, their power
fluctuate between medium to high.
2.3. Power of Buyers
The major factor affecting the power of buyers is the high switching costs.
If a person has one bank taking in charge all his banking needs (saving,
mortgage, checking, etc) it can be very annoying for him to switch to another
bank. But the internet has greatly increased the power of the consumer by
reducing the cost of comparing the prices of opening and holding accounts as
well as the rates offered by banks.
2.1. Threat of New Entrants
The biggest barrier of entry for the banking industry is trust, because the industry
deals with others money so people are more willing to place their trust with a well
known bank not with a new bank.
Also there are other factors such as the strict regulations and the international
compliance. To conclude, the barriers to entry are high for the banking industry.
2.2. Power of Suppliers
The primary resource of any bank is the capital. By this capital banks are able to
successfully respond to their customers borrowing needs while maintaining
enough liquidly and capital to meet withdrawal expectations.
There are four major suppliers of capital in the banking industry: Customer
deposits, mortgages and loans, mortgages-baked securities, loans from other
financial institutions. The power of supplier is based on the market, their power
fluctuate between medium to high.
2.3. Power of Buyers
The major factor affecting the power of buyers is the high switching costs.
If a person has one bank taking in charge all his banking needs (saving,
mortgage, checking, etc) it can be very annoying for him to switch to another
bank. But the internet has greatly increased the power of the consumer by
reducing the cost of comparing the prices of opening and holding accounts as
well as the rates offered by banks.
By this, we can admit that the power of buyer is relatively low to medium.
2.4. Availability of Substitutes
The largest threat for the banking industry is the threat of substitutes.
The industry suffers from non-banking companies offering some banking
services as insurances, mutual funds, fixed income securities or offering payment
method substitutes and loan. Often these non-banking companies offers interest
rates on payment lower then banks. The threat of availability of substitutes varies
from medium to high.
2.5. Competitive Rivalry
The banking competition is high because everyone who needs banking services
already has them. Because of this, banks attempt to attract customers from other
banks by many ways such as offering lower financing, higher rates, investment
services, and greater conveniences than competitors.
It’s all about which bank can offer both the best and fastest services, which has
caused banks to experience a lower ROA.
2.4. Availability of Substitutes
The largest threat for the banking industry is the threat of substitutes.
The industry suffers from non-banking companies offering some banking
services as insurances, mutual funds, fixed income securities or offering payment
method substitutes and loan. Often these non-banking companies offers interest
rates on payment lower then banks. The threat of availability of substitutes varies
from medium to high.
2.5. Competitive Rivalry
The banking competition is high because everyone who needs banking services
already has them. Because of this, banks attempt to attract customers from other
banks by many ways such as offering lower financing, higher rates, investment
services, and greater conveniences than competitors.
It’s all about which bank can offer both the best and fastest services, which has
caused banks to experience a lower ROA.
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3. Bankmed 5 C’S Analysis
3.1. Company
3.1.1. Profile
Bank Name: Bankmed S.A.L
Ownership: GROUPMED HOLDING SAL
Chairman & General Manager: Mohammed Hariri
Executive General Manager: Mohamed Ali Beyhum
Head Office Clemenceau Beirut, Lebanon
Date of Establishment 1944
Number of Staff 2,658, 51.20% males and 48.80% females
Local ATMs: 131
Local Branches: 66
Overseas branches: 05 (Limassol, Baghdad, Basra, Erbil, Dubai)
Subsidiaries: 13
3.1. Company
3.1.1. Profile
Bank Name: Bankmed S.A.L
Ownership: GROUPMED HOLDING SAL
Chairman & General Manager: Mohammed Hariri
Executive General Manager: Mohamed Ali Beyhum
Head Office Clemenceau Beirut, Lebanon
Date of Establishment 1944
Number of Staff 2,658, 51.20% males and 48.80% females
Local ATMs: 131
Local Branches: 66
Overseas branches: 05 (Limassol, Baghdad, Basra, Erbil, Dubai)
Subsidiaries: 13
3.1.2. Financial highlights
The results of 2016 compared to 2012 are good;
Balance Sheet Highlights (USD
millions) 2012 2013 2014 2015 2016
Total Assets 12,507
13,79
0
15,42
0
15,55
1 16,022
Total Loans 4,334 4,488 4,746 5,140 5,061
Total Deposits 9,862
11,05
1
12,12
3
12,07
5 12,078
Total Equity 1,289 1,348 1,501 1,520 1,545
Total assets, total loan, total deposits, and total equity increased respectively by
28%, 17%, 22%, 20%.
Income Statement Highlights
201
2
201
3
201
4
201
5
201
6
(USD millions)
Net Interest Income 210 220 264 299 279
Commissions & Fees 53 55 62 62 101
Net Financial Revenues 414 474 468 605 602
Net Income 127 128 133 139 130
Net interest income, commissions and fees, net financial revenue and net income
increased respectively by 33%, 191%, 46%, 2%.
201
2
201
3
201
4
201
5
201
6
Total Staff
211
5
220
7
240
8
262
4
265
8
The results of 2016 compared to 2012 are good;
Balance Sheet Highlights (USD
millions) 2012 2013 2014 2015 2016
Total Assets 12,507
13,79
0
15,42
0
15,55
1 16,022
Total Loans 4,334 4,488 4,746 5,140 5,061
Total Deposits 9,862
11,05
1
12,12
3
12,07
5 12,078
Total Equity 1,289 1,348 1,501 1,520 1,545
Total assets, total loan, total deposits, and total equity increased respectively by
28%, 17%, 22%, 20%.
Income Statement Highlights
201
2
201
3
201
4
201
5
201
6
(USD millions)
Net Interest Income 210 220 264 299 279
Commissions & Fees 53 55 62 62 101
Net Financial Revenues 414 474 468 605 602
Net Income 127 128 133 139 130
Net interest income, commissions and fees, net financial revenue and net income
increased respectively by 33%, 191%, 46%, 2%.
201
2
201
3
201
4
201
5
201
6
Total Staff
211
5
220
7
240
8
262
4
265
8
Number of staff has increased by 26%.
Key Ratios (%) 2012 2013 2014 2015 2016
Capital Adequacy - Basel III
13.4
2
14.0
1
14.3
1
15.2
8
15.4
4
Loan Loss Provisions to Non-
performing Loan
169.
9
202.
4
151.
4
159.
4
101.
6
The capital adequacy has increased by 2.02% reaching 15.44% (comfortably
exceeding the regulatory requirement of 12% set by the Central Bank of
Lebanon), and loan loss provision to non-performing loan has decreased by
60%.
3.1.3. About Bankmed
Established in 1944, Bankmed has been traditionally known as a corporate bank
given the financing arrangement and loans it gave to facilitate the reconstruction
of the country in the 90s after the end of the war.
"Whether it was about rebuilding leading hotel, launching restaurants, restoring
ski resorts or even repairing hospital, Bankmed was there as one of the main
sponsors" says Mohamed Ali Beyhum, executive general manager.
Knowing the importance of keeping pace with the needs of a fast-changing
financial landscape, Bankmed also started focusing increasingly on retail, private,
commercial, investment, and brokerage services.
By this, it has changed the image of corporate bank, and been able to
successfully cater to different segments (individual, large corporate clients, as
well as small and medium enterprises).
Key Ratios (%) 2012 2013 2014 2015 2016
Capital Adequacy - Basel III
13.4
2
14.0
1
14.3
1
15.2
8
15.4
4
Loan Loss Provisions to Non-
performing Loan
169.
9
202.
4
151.
4
159.
4
101.
6
The capital adequacy has increased by 2.02% reaching 15.44% (comfortably
exceeding the regulatory requirement of 12% set by the Central Bank of
Lebanon), and loan loss provision to non-performing loan has decreased by
60%.
3.1.3. About Bankmed
Established in 1944, Bankmed has been traditionally known as a corporate bank
given the financing arrangement and loans it gave to facilitate the reconstruction
of the country in the 90s after the end of the war.
"Whether it was about rebuilding leading hotel, launching restaurants, restoring
ski resorts or even repairing hospital, Bankmed was there as one of the main
sponsors" says Mohamed Ali Beyhum, executive general manager.
Knowing the importance of keeping pace with the needs of a fast-changing
financial landscape, Bankmed also started focusing increasingly on retail, private,
commercial, investment, and brokerage services.
By this, it has changed the image of corporate bank, and been able to
successfully cater to different segments (individual, large corporate clients, as
well as small and medium enterprises).
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The market share of Bankmed has grown over the years and comprises
nowadays almost 10 percent of the total Lebanese banking system.
Keeping in mind the importance of diversification, Bankmed has been boosting
lending the small and middle market by signing an agreement with the Overseas
Private Investment Corporation (Opic) and Kafalat (a loan guarantee company
established by the government).
However, corporate banking is still the major activity of Bankmed as it holds one
of the major lending portfolios in the Lebanese market, having top tier corporate
clients and covering different industries. The commercial lending portfolio of
Bankmed witnessed considerable growth (25%) even during the spite of regional
turmoil and its financial consequences in 2011.
Bankmed has managed to expand its customer base and attract new client by
establishing an International Banking Business entity in order to serve its
customers outside Lebanon.
Taking into consideration the increasing demand on trade finance, Bankmed has
put efforts towards enhancing this opportunity. Thanks to its strong network
banking partners consisting of more than 70 names in over 55 countries, it has
been able to successfully expand its trade finance on both primary and
secondarily markets.
On the 27th of October 2016 it has successfully established its $500 Million Short
Term Certificates of Deposit Program (rated C (short-term) / B- (long term)
by S&P), marking the first Short Term Certificates of Deposit Program
established by a Lebanese bank in the international markets.
The Program is listed on the Luxembourg Stock Exchange, for now they will be
no initial sale or marketing of the Certificates in Lebanon.
By the end of 2016, bankmed's total assets stood at million US$16,022 (at
ex.rate 1508.00) it had customer deposits of US$ 12,078 and total loans of just
over US$5,061.
nowadays almost 10 percent of the total Lebanese banking system.
Keeping in mind the importance of diversification, Bankmed has been boosting
lending the small and middle market by signing an agreement with the Overseas
Private Investment Corporation (Opic) and Kafalat (a loan guarantee company
established by the government).
However, corporate banking is still the major activity of Bankmed as it holds one
of the major lending portfolios in the Lebanese market, having top tier corporate
clients and covering different industries. The commercial lending portfolio of
Bankmed witnessed considerable growth (25%) even during the spite of regional
turmoil and its financial consequences in 2011.
Bankmed has managed to expand its customer base and attract new client by
establishing an International Banking Business entity in order to serve its
customers outside Lebanon.
Taking into consideration the increasing demand on trade finance, Bankmed has
put efforts towards enhancing this opportunity. Thanks to its strong network
banking partners consisting of more than 70 names in over 55 countries, it has
been able to successfully expand its trade finance on both primary and
secondarily markets.
On the 27th of October 2016 it has successfully established its $500 Million Short
Term Certificates of Deposit Program (rated C (short-term) / B- (long term)
by S&P), marking the first Short Term Certificates of Deposit Program
established by a Lebanese bank in the international markets.
The Program is listed on the Luxembourg Stock Exchange, for now they will be
no initial sale or marketing of the Certificates in Lebanon.
By the end of 2016, bankmed's total assets stood at million US$16,022 (at
ex.rate 1508.00) it had customer deposits of US$ 12,078 and total loans of just
over US$5,061.
3.1.4. Product line
Bankmed S.A.L provides commercial and private banking products and services
to personal and business customers.
By continuously introducing unique retail product and services tailor-made to
customer’s individual needs, Bankmed’s retail banking has considerably grown
and its delivery channels has enhanced by adding new branches and entering
new markets.
Besides retail, Bankmed has offered to its customer wide chances to invest by
giving them access to local, regional and international markets through its
extensive and solid relationships with brokers and market makers around the
world. Bankmed’s treasury focused its efforts on structuring and marketing
different hedging and investment products. Also, a brokerage services is
available 24 hours a day has been handled by the bank’s wholly-owned
subsidiary (MedSecurities) introducing new investment products and services.
Products
Current and savings accounts, payroll accounts, safe boxes, loans (house, car
and personal), credit and debit cards, prepaid cards, business loans, overdrafts,
trade finance, subsidized loans, working capital financing and other facilities.
Services
Syndication services, wealth management and brokerage, investment banking
and treasury services, insurance brokerage services, corporate finance advisory
and asset management services, online and mobile banking services, merchant
services and real estate management services.
Bankmed S.A.L provides commercial and private banking products and services
to personal and business customers.
By continuously introducing unique retail product and services tailor-made to
customer’s individual needs, Bankmed’s retail banking has considerably grown
and its delivery channels has enhanced by adding new branches and entering
new markets.
Besides retail, Bankmed has offered to its customer wide chances to invest by
giving them access to local, regional and international markets through its
extensive and solid relationships with brokers and market makers around the
world. Bankmed’s treasury focused its efforts on structuring and marketing
different hedging and investment products. Also, a brokerage services is
available 24 hours a day has been handled by the bank’s wholly-owned
subsidiary (MedSecurities) introducing new investment products and services.
Products
Current and savings accounts, payroll accounts, safe boxes, loans (house, car
and personal), credit and debit cards, prepaid cards, business loans, overdrafts,
trade finance, subsidized loans, working capital financing and other facilities.
Services
Syndication services, wealth management and brokerage, investment banking
and treasury services, insurance brokerage services, corporate finance advisory
and asset management services, online and mobile banking services, merchant
services and real estate management services.
Products and Services in details:
Accounts: Current account (current checking account, current non-checking
account, payroll gold package, payroll full package, payroll free package),
Savings account (sight savings account, time deposit account) Current non-
checking account, Wedding account, Youth account, Safe box.
Loans: Personal loan (personal loan LBP, smart loan, personal loan), car loan
(new car loan, used car loan), Home loan (home loan governed by BDL, smart
home loan, home loan, home loan in collaboration with the public corporation for
housing).
Mileage cards: Medmiles visa platinum credit card, Medmiles visa signature
credit card, Medmiles VisaGold credit card, Medmiles visa classic credit card,
Medmiles visa infinite credit cards, Medmiles cards.
Credit cards: Mastercard platinum credit card, visa platinum credit card, visa
infinite credit card, visa classic credit card, VisaGold credit cards, visa business
credit card, mastercard regular credit card, platinum euro credit card, mastercard
gold credit card, visa classic credit card in LBP.
Prepaid debit cards: visa platinum debit card, visa travel prepaid card, visa debit
card in LBP, visa internet prepaid card, visa income prepaid card.
Corporate banking: trade finance, overdrafts, corporate loan, syndication.
SME banking: working capital financing, business loan, kafalat agriculture,
kafalat basic, kafalat energy, kafalat innovative.
Treasury: capital market, foreign exchange, money market, treasury sales.
Hedging services: hedging solutions for commercial entities, FX hedging
solutions for individuals, international transfers, non-deliverable forwards (NDFs)
Investment services: Online trading, investment services.
E services: Iris recognition banking services, e-statement services, e-services,
phone banking services (MedPhone), online banking services (MedOnline),
PinPay services, mobile banking application (MedMobile), Med e-branch, Med e-
zone.
Accounts: Current account (current checking account, current non-checking
account, payroll gold package, payroll full package, payroll free package),
Savings account (sight savings account, time deposit account) Current non-
checking account, Wedding account, Youth account, Safe box.
Loans: Personal loan (personal loan LBP, smart loan, personal loan), car loan
(new car loan, used car loan), Home loan (home loan governed by BDL, smart
home loan, home loan, home loan in collaboration with the public corporation for
housing).
Mileage cards: Medmiles visa platinum credit card, Medmiles visa signature
credit card, Medmiles VisaGold credit card, Medmiles visa classic credit card,
Medmiles visa infinite credit cards, Medmiles cards.
Credit cards: Mastercard platinum credit card, visa platinum credit card, visa
infinite credit card, visa classic credit card, VisaGold credit cards, visa business
credit card, mastercard regular credit card, platinum euro credit card, mastercard
gold credit card, visa classic credit card in LBP.
Prepaid debit cards: visa platinum debit card, visa travel prepaid card, visa debit
card in LBP, visa internet prepaid card, visa income prepaid card.
Corporate banking: trade finance, overdrafts, corporate loan, syndication.
SME banking: working capital financing, business loan, kafalat agriculture,
kafalat basic, kafalat energy, kafalat innovative.
Treasury: capital market, foreign exchange, money market, treasury sales.
Hedging services: hedging solutions for commercial entities, FX hedging
solutions for individuals, international transfers, non-deliverable forwards (NDFs)
Investment services: Online trading, investment services.
E services: Iris recognition banking services, e-statement services, e-services,
phone banking services (MedPhone), online banking services (MedOnline),
PinPay services, mobile banking application (MedMobile), Med e-branch, Med e-
zone.
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3.2. Bankmed Expansion & Collaboration
Member of: Association of Banks in Lebanon, The institute of international
Finance Inc, Interarab Cambist Association.
One of the important strategies of Bankmed has been the international
expansion.
Bankmed expanded its presence internationally through 5 overseas branches in
Limassol, Baghdad, Erbil, Basra, and Dubai. Besides the branches, Bankmed
has opted for banking subsidiaries in Geneva, Istanbul, Riyadh, Saudi Arabia and
Dubai.
"Bankmed's strategy is to foster and capitalize on its presence in these strategic
markets, while at the same time being constantly on the lookout for other
opportunities that could emerge elsewhere in the region" says Mr. Beyhum.
Cyprus
Bankmed’s Limassol Branch aims to provide local and international clients with
superior quality service by offering a wide range of products covering
Corporate, Commercial, trade finance and housing loans within the regulations
applied by the European Union.
Iraq
Three branches were opened in Iraq mainly in Baghdad, Basra, and Erbil.
Those branches are considered retail and commercial.
Member of: Association of Banks in Lebanon, The institute of international
Finance Inc, Interarab Cambist Association.
One of the important strategies of Bankmed has been the international
expansion.
Bankmed expanded its presence internationally through 5 overseas branches in
Limassol, Baghdad, Erbil, Basra, and Dubai. Besides the branches, Bankmed
has opted for banking subsidiaries in Geneva, Istanbul, Riyadh, Saudi Arabia and
Dubai.
"Bankmed's strategy is to foster and capitalize on its presence in these strategic
markets, while at the same time being constantly on the lookout for other
opportunities that could emerge elsewhere in the region" says Mr. Beyhum.
Cyprus
Bankmed’s Limassol Branch aims to provide local and international clients with
superior quality service by offering a wide range of products covering
Corporate, Commercial, trade finance and housing loans within the regulations
applied by the European Union.
Iraq
Three branches were opened in Iraq mainly in Baghdad, Basra, and Erbil.
Those branches are considered retail and commercial.
On the retail side, it offers a large variety of payment cards having distinctive
features as well as personal and housing loans having fast approval and
competitive interest rates.
One the commercial side, it offers corporate commercial lending and caters for
high quality trade-finance services such as foreign exchange, letters of credit,
letters of guarantees, and documentary credit.
Saudi Arabia
SaudiMed Investment Company has been established by Bankmed as a financial
services company in the Kingdom of Saudi Arabia. The said company acts a
financial intermediary incorporated as a closed joint stock in Saudi Arabia in
December 2007 and regulated by the Saudi Capital Market Authority (CMA). It
offers the following services: financial and investment advisory services,
investment funds management, dealing (principal/underwriter), and custody.
GroupMed Insurance Brokers - KSA Limited is an insurance and reinsurance
brokerage services company 55% owned by GroupMed Insurance Brokers-
Lebanon S.A.L (wholly owned subsidiary of Bankmed),
35% owned by GroupMed International Management Holding Limited and 10%
by individual shareholding.
This company is incorporated in the Kingdom of Saudi Arabia and licensed by
the Saudi Arabian Monetary Agency since September 2, 2014.
Switzerland:
Bankmed’s subsidiary in Switzerland, BankMed Suisse, offers a wide range of
private banking, asset management services, and investment products (in-house
funds, structured products, external funds, and other investment
recommendations) out of Geneva to high net worth individual, mainly from the
Middle East and the GCC countries. Its management team has over 30 years of
integrated wealth management experience striving to serve clients with utmost
features as well as personal and housing loans having fast approval and
competitive interest rates.
One the commercial side, it offers corporate commercial lending and caters for
high quality trade-finance services such as foreign exchange, letters of credit,
letters of guarantees, and documentary credit.
Saudi Arabia
SaudiMed Investment Company has been established by Bankmed as a financial
services company in the Kingdom of Saudi Arabia. The said company acts a
financial intermediary incorporated as a closed joint stock in Saudi Arabia in
December 2007 and regulated by the Saudi Capital Market Authority (CMA). It
offers the following services: financial and investment advisory services,
investment funds management, dealing (principal/underwriter), and custody.
GroupMed Insurance Brokers - KSA Limited is an insurance and reinsurance
brokerage services company 55% owned by GroupMed Insurance Brokers-
Lebanon S.A.L (wholly owned subsidiary of Bankmed),
35% owned by GroupMed International Management Holding Limited and 10%
by individual shareholding.
This company is incorporated in the Kingdom of Saudi Arabia and licensed by
the Saudi Arabian Monetary Agency since September 2, 2014.
Switzerland:
Bankmed’s subsidiary in Switzerland, BankMed Suisse, offers a wide range of
private banking, asset management services, and investment products (in-house
funds, structured products, external funds, and other investment
recommendations) out of Geneva to high net worth individual, mainly from the
Middle East and the GCC countries. Its management team has over 30 years of
integrated wealth management experience striving to serve clients with utmost
discretion, dedication and professionalism. Its success lies in its ability to
formulate creative and innovative private banking solutions unique to each
individual client’s investment objectives.
Turkey:
Turkland Bank was founded in 1985 and went through a series of acquisitions
until January 2007 when it was acquired by Arab Bank (50%) and Bankmed
(41%- became 50% in July 2010) who have increased the bank’s capital and
introduces a series of reforms which included the restructuration of the bank, the
upgrading of the core banking system and a new management team.
The shareholders with a partial contribution from a new shareholder (Arab Bank
Switzerland) increased the bank’s capital through two injections (2011 & 2014)
from TL 170 million to TL 650 million
The current partnership structure is as follows: Bankmed 50%, Arab Bank PLC
28%, and Arab Bank Switzerland 22%.
T-Bank operates within a network of 34 branches offering timely and tailor-made
solutions to the commercial business sector and to the small and medium-sized
enterprises.
Its services include treasury and cash management, investment services, trade
finance, and personal banking services. By this, T-bank has emerges as one of
the fasted growing mid-sized banks in Turkey.
Turkland Sigorta (T-Sigorta) is an insurance company regulated by the Turkish
Undersecretary of Treasury having as a main objective to undertake all kinds of
insurances except for life insurance.
The Company was registered with Istanbul Trade Registry.
The goal behind this acquisition was to broaden the insurance network of
GroupMed Insurance.
United Arab Emirates:
formulate creative and innovative private banking solutions unique to each
individual client’s investment objectives.
Turkey:
Turkland Bank was founded in 1985 and went through a series of acquisitions
until January 2007 when it was acquired by Arab Bank (50%) and Bankmed
(41%- became 50% in July 2010) who have increased the bank’s capital and
introduces a series of reforms which included the restructuration of the bank, the
upgrading of the core banking system and a new management team.
The shareholders with a partial contribution from a new shareholder (Arab Bank
Switzerland) increased the bank’s capital through two injections (2011 & 2014)
from TL 170 million to TL 650 million
The current partnership structure is as follows: Bankmed 50%, Arab Bank PLC
28%, and Arab Bank Switzerland 22%.
T-Bank operates within a network of 34 branches offering timely and tailor-made
solutions to the commercial business sector and to the small and medium-sized
enterprises.
Its services include treasury and cash management, investment services, trade
finance, and personal banking services. By this, T-bank has emerges as one of
the fasted growing mid-sized banks in Turkey.
Turkland Sigorta (T-Sigorta) is an insurance company regulated by the Turkish
Undersecretary of Treasury having as a main objective to undertake all kinds of
insurances except for life insurance.
The Company was registered with Istanbul Trade Registry.
The goal behind this acquisition was to broaden the insurance network of
GroupMed Insurance.
United Arab Emirates:
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Bankmed (DIFC Branch) is a branch in the Dubai International Financial Centre
(DIFC), Bankmed is the first bank from the MENA Region to operate under
category I license. Besides having a wide range of financial solutions, it offers
mainly Corporate credit facilities, trade finance and treasury services.
MedSecurities (Dubai) is regulated by Dubai Financial Services Authority
(DFSA). It aims to be a leading provider of investment solutions in Lebanon and
the region. Being a fully-fledged financial institution, it provides various financial
products such as brokerage services, structured products, equities and fixed
income trading, relationship management and asset management services. It
received the “Best Broker in Lebanon” award for three consecutive years by Euro
money Institutional Investor. It received a category 3 license in the DIFC entitling
it to satisfy customer’s financial demand within a world-class regulatory
framework.
3.3. Customers
Market: Lebanon, Switzerland, Saudi Arabia, Cyprus, Iraq, Turkey, UAE.
Customers are: Retail customers, corporate customers, SMEs.
Customers wants good services, assistance for their financial needs, and
benefits that meet their expectations. They want a Bank they can trust which
gives them the tools to manage their money better and in a secure way.
Bankmed aims to provide that with the right products and services, but also by
ensuring that it will never compromise on security and safety.
Bankmed is a leader in terms of improving its products and services, and has
continuous efforts to enhance its customers’ experience. Bankmed has always
been keen on introducing new concepts of unique services that suit consumer
needs, strengthen its contribution among banking sector competitors, and attract
(DIFC), Bankmed is the first bank from the MENA Region to operate under
category I license. Besides having a wide range of financial solutions, it offers
mainly Corporate credit facilities, trade finance and treasury services.
MedSecurities (Dubai) is regulated by Dubai Financial Services Authority
(DFSA). It aims to be a leading provider of investment solutions in Lebanon and
the region. Being a fully-fledged financial institution, it provides various financial
products such as brokerage services, structured products, equities and fixed
income trading, relationship management and asset management services. It
received the “Best Broker in Lebanon” award for three consecutive years by Euro
money Institutional Investor. It received a category 3 license in the DIFC entitling
it to satisfy customer’s financial demand within a world-class regulatory
framework.
3.3. Customers
Market: Lebanon, Switzerland, Saudi Arabia, Cyprus, Iraq, Turkey, UAE.
Customers are: Retail customers, corporate customers, SMEs.
Customers wants good services, assistance for their financial needs, and
benefits that meet their expectations. They want a Bank they can trust which
gives them the tools to manage their money better and in a secure way.
Bankmed aims to provide that with the right products and services, but also by
ensuring that it will never compromise on security and safety.
Bankmed is a leader in terms of improving its products and services, and has
continuous efforts to enhance its customers’ experience. Bankmed has always
been keen on introducing new concepts of unique services that suit consumer
needs, strengthen its contribution among banking sector competitors, and attract
a large segment of customers.
Recently, BankMed has geared its efforts toward a focus on SMEs: an
increasingly important segment of the economy. As such, and given its growing
concern with sustainable community development, BankMed established Emkan
Finance SAL in June 2011; a financial institution licensed by the Central Bank of
Lebanon.
3.4. Climate: PEST
Banking sector plays a major role in the economy by providing credits and
collecting deposits from people, states, businesses, and various individuals. The
banking system is the most dominant segment of the financial sector. Banks are
known for playing a critical role in implementing financial policy, planning and
prioritizing goals.
In order to analyze and evaluate various factors which determines and affects the
environment of Bankmed, the PEST analysis is a must. This analysis aims to
identifies and evaluate various factors in order to achieve optimum performance.
Gathering information about each category (political, economic, social, and
technological) gives us more knowledge about the environment. By this, it
becomes an easy job to spot our opportunities and our threats.
3.4.1. Political factors
Lebanon has suffered throughout history and still from an instable political
situation. Besides affecting the general condition of Lebanon, it has also affected
the foreign investors, and multinational countries making them hesitate about
keeping their money as they are afraid of corruption and a potential war.
Recently, BankMed has geared its efforts toward a focus on SMEs: an
increasingly important segment of the economy. As such, and given its growing
concern with sustainable community development, BankMed established Emkan
Finance SAL in June 2011; a financial institution licensed by the Central Bank of
Lebanon.
3.4. Climate: PEST
Banking sector plays a major role in the economy by providing credits and
collecting deposits from people, states, businesses, and various individuals. The
banking system is the most dominant segment of the financial sector. Banks are
known for playing a critical role in implementing financial policy, planning and
prioritizing goals.
In order to analyze and evaluate various factors which determines and affects the
environment of Bankmed, the PEST analysis is a must. This analysis aims to
identifies and evaluate various factors in order to achieve optimum performance.
Gathering information about each category (political, economic, social, and
technological) gives us more knowledge about the environment. By this, it
becomes an easy job to spot our opportunities and our threats.
3.4.1. Political factors
Lebanon has suffered throughout history and still from an instable political
situation. Besides affecting the general condition of Lebanon, it has also affected
the foreign investors, and multinational countries making them hesitate about
keeping their money as they are afraid of corruption and a potential war.
Besides the instable political situation, the biggest challenge for the banking
sector is the deterioration of public finances (fiscal deficit grew to 10.5% of GDP)
and the growing public debt (143% of GDP ) due to their impact on the credit
rating of banks having sovereign debt exposure, on interest, and on the
confidence of investors and depositors.
The above mentioned factors led to an increase exposure to sovereign debt
which caused a decrease in rating of some major banks.
BDL plays a major role in helping the Lebanese economy thanks to its stimulus
package which offered subsidized loans in various sectors in previous years and
likely to be renewed in 2018 at USD 1 billion. Also, it applied a new financial
engineering in order to attract fresh money and retained deposits that were
placed last year as part of 2016 BDL debt swap operations. By this, BDL
intention was to weaken external position
Going forward, the expectations on the outlook of the banking system are:
The domestically persisting challenging conditions.
The economic slowdown in neighboring countries will lead to more
declines in financial inflows.
The implementation of tax reforms to finance public sector pay rise,
resulting in higher taxes for Lebanese banks and of course less
profitability.
3.4.2. Economic factors
Characteristics:
1. Large number of banks (different sizes, nature, and ownership structure).
2. Significant openness to abroad
3. Highly qualified human resources
4. Sector largely integrated in the Lebanese economy
5. Favorable and sustainable growth and performance
6. Strong ability to weather and overcome shocks and crisis
sector is the deterioration of public finances (fiscal deficit grew to 10.5% of GDP)
and the growing public debt (143% of GDP ) due to their impact on the credit
rating of banks having sovereign debt exposure, on interest, and on the
confidence of investors and depositors.
The above mentioned factors led to an increase exposure to sovereign debt
which caused a decrease in rating of some major banks.
BDL plays a major role in helping the Lebanese economy thanks to its stimulus
package which offered subsidized loans in various sectors in previous years and
likely to be renewed in 2018 at USD 1 billion. Also, it applied a new financial
engineering in order to attract fresh money and retained deposits that were
placed last year as part of 2016 BDL debt swap operations. By this, BDL
intention was to weaken external position
Going forward, the expectations on the outlook of the banking system are:
The domestically persisting challenging conditions.
The economic slowdown in neighboring countries will lead to more
declines in financial inflows.
The implementation of tax reforms to finance public sector pay rise,
resulting in higher taxes for Lebanese banks and of course less
profitability.
3.4.2. Economic factors
Characteristics:
1. Large number of banks (different sizes, nature, and ownership structure).
2. Significant openness to abroad
3. Highly qualified human resources
4. Sector largely integrated in the Lebanese economy
5. Favorable and sustainable growth and performance
6. Strong ability to weather and overcome shocks and crisis
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The slowdown in economy activity:
Economic growth has significantly decreased nowadays from 7% to 2% due to
many factors such as the political instability, the decrease of multiple sectors
(tourism, commercial, and real estate), foreign direct investment, and exports.
Tourism sector activity shrank by about 40%, the commercial sector by about
30% and the real estate sector by about 25%. As for foreign direct investment, it
shrank by about 42%, while exports contracted by about 23% the balance of
payments moved from a surplus to a deficit.
The rising operational costs:
Institutions have a growing demand on facilities from the Central Bank of
Lebanon and the commercial banks in order to settle their loans.
The provision on loan reached 76%, non-performing loan accounts for 5.4% of
the total loans which is high compared the regional percentage (close to 4.6%)
Many concern over the increase of non-performing personal loans (27.8% of the
total loan).
Maintaining the banking sector growth pace:
Banks’ assets reached USD 208 billion in Q2/17 funded at ~80% by deposits a
USD 168 billion while loans amounted to USD 53 billion. Net profits of Alpha
banks grew by 10% in H1/17 although banks maintained their conservative
lending policies amid tougher operating environment which translated into softer
lending growth and higher gross doubtful loans at 7.46% in June 2017 from
6.81% in 2016. Banks’ assets reached USD 208 billion in Q2/17 constitute of
80% deposits (USD 168 Billion). Loan amounted to USD 53 billion of total asset
which reveals the conservative lending policies (softer lending growth and higher
gross doubtful loans). Net profits of Alpha banks grew by 10% in H1/17. Till now
the application of international compliance rules didn’t affect much profitability of
banks, but the application of IFRS 9 in 2018 will surely do.
Economic growth has significantly decreased nowadays from 7% to 2% due to
many factors such as the political instability, the decrease of multiple sectors
(tourism, commercial, and real estate), foreign direct investment, and exports.
Tourism sector activity shrank by about 40%, the commercial sector by about
30% and the real estate sector by about 25%. As for foreign direct investment, it
shrank by about 42%, while exports contracted by about 23% the balance of
payments moved from a surplus to a deficit.
The rising operational costs:
Institutions have a growing demand on facilities from the Central Bank of
Lebanon and the commercial banks in order to settle their loans.
The provision on loan reached 76%, non-performing loan accounts for 5.4% of
the total loans which is high compared the regional percentage (close to 4.6%)
Many concern over the increase of non-performing personal loans (27.8% of the
total loan).
Maintaining the banking sector growth pace:
Banks’ assets reached USD 208 billion in Q2/17 funded at ~80% by deposits a
USD 168 billion while loans amounted to USD 53 billion. Net profits of Alpha
banks grew by 10% in H1/17 although banks maintained their conservative
lending policies amid tougher operating environment which translated into softer
lending growth and higher gross doubtful loans at 7.46% in June 2017 from
6.81% in 2016. Banks’ assets reached USD 208 billion in Q2/17 constitute of
80% deposits (USD 168 Billion). Loan amounted to USD 53 billion of total asset
which reveals the conservative lending policies (softer lending growth and higher
gross doubtful loans). Net profits of Alpha banks grew by 10% in H1/17. Till now
the application of international compliance rules didn’t affect much profitability of
banks, but the application of IFRS 9 in 2018 will surely do.
3.4.3. Socio-cultural factors
Giving more loans to the non-resident private sector
As a result of a tight domestic market, limited investment opportunities, the
excessive liquidity in banks (30% of total deposits), a decline in foreign direct
investment, a slowing economic activity and real estate and consumer loan
reaching maximal levels.
Significant openness to abroad
Besides having a large network of correspondent banks, Lebanese banks’
expanded (through branches, affiliated companies, subsidiaries, sister banks and
representatives offices) in Arab neighboring countries, Gulf region, Europe, Africa
and the United States. Also Arab and foreign banks are well active in Lebanon.
Highly qualified human resources
Human resources are well trained highly qualified and experienced.
They aim to higher University degrees and are aware of the importance of
continuous trainings and exposure to recent developments in the world banking
industry. Lebanese women became more present in the senior positions.
3.4.4. Technological factors
Technology in the banking sector is critical in improving efficiencies and
enhancing the customer experience.
In order to better serve its clients, banks has embraced the use of technology
turning the banking industry from paper and branch based banks to digitized and
networked banking services. Implementing technologies is costly, but the
rewards are limitless.
Giving more loans to the non-resident private sector
As a result of a tight domestic market, limited investment opportunities, the
excessive liquidity in banks (30% of total deposits), a decline in foreign direct
investment, a slowing economic activity and real estate and consumer loan
reaching maximal levels.
Significant openness to abroad
Besides having a large network of correspondent banks, Lebanese banks’
expanded (through branches, affiliated companies, subsidiaries, sister banks and
representatives offices) in Arab neighboring countries, Gulf region, Europe, Africa
and the United States. Also Arab and foreign banks are well active in Lebanon.
Highly qualified human resources
Human resources are well trained highly qualified and experienced.
They aim to higher University degrees and are aware of the importance of
continuous trainings and exposure to recent developments in the world banking
industry. Lebanese women became more present in the senior positions.
3.4.4. Technological factors
Technology in the banking sector is critical in improving efficiencies and
enhancing the customer experience.
In order to better serve its clients, banks has embraced the use of technology
turning the banking industry from paper and branch based banks to digitized and
networked banking services. Implementing technologies is costly, but the
rewards are limitless.
Some role of technology in the banking system:
E-banking: Enabling banks to deliver its services easily to its high end
customers. By this, customers are able to access their bank details on
their own computers, make money transfers from one account to
another, print bank statements and inquire about their financial
transactions.
Plastic money: By introducing credit cards or smart cards like “visa
electron” the banking industry became more flexible than before. Credit
card has given the possibility of borrowing small money to buy anything
and the bank bills them later. Whereas with “Smart Cards” like visa
electron, customer can pay for anything or deposit money using an
ATM and that money will be deducted from their account or added to
their account.
Self-inquiry: Instead of having customers lining up at branches, a
customer can now use ATMs, saving a lot time on both sides.
Remote banking: ATMs are in various areas, by this customers doesn’t
have to go to the main branch to make transactions.
3.5. Competitors
All Alpha Banks, the top 10 banks in Lebanon, including Bankmed represent 80 %
of the market share. All alpha Banks are big competitors in the market in terms of
the services they offer to their clients, interest rates, and customer services.
Regional competition: regional banks have been able to compete with
Lebanese banks, as they now have the knowledge, experience, wide
expansion and the ability to offer modern and advanced banking services to
their customers.
E-banking: Enabling banks to deliver its services easily to its high end
customers. By this, customers are able to access their bank details on
their own computers, make money transfers from one account to
another, print bank statements and inquire about their financial
transactions.
Plastic money: By introducing credit cards or smart cards like “visa
electron” the banking industry became more flexible than before. Credit
card has given the possibility of borrowing small money to buy anything
and the bank bills them later. Whereas with “Smart Cards” like visa
electron, customer can pay for anything or deposit money using an
ATM and that money will be deducted from their account or added to
their account.
Self-inquiry: Instead of having customers lining up at branches, a
customer can now use ATMs, saving a lot time on both sides.
Remote banking: ATMs are in various areas, by this customers doesn’t
have to go to the main branch to make transactions.
3.5. Competitors
All Alpha Banks, the top 10 banks in Lebanon, including Bankmed represent 80 %
of the market share. All alpha Banks are big competitors in the market in terms of
the services they offer to their clients, interest rates, and customer services.
Regional competition: regional banks have been able to compete with
Lebanese banks, as they now have the knowledge, experience, wide
expansion and the ability to offer modern and advanced banking services to
their customers.
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Non financial institution: nowadays non financial institution per example
business owners propose facilities in payment to their client, these facilities
are similar to loan given by banks and are more likely to have lower
interests.
Non-banking financial: companies like insurance companies can affect the
business of Banks.
4. The McKinsey 7-S
4.1. Structure
business owners propose facilities in payment to their client, these facilities
are similar to loan given by banks and are more likely to have lower
interests.
Non-banking financial: companies like insurance companies can affect the
business of Banks.
4. The McKinsey 7-S
4.1. Structure
4.1.1. Board of directors
Mohammed Hariri: Chairman of the Board of Directors and General Manager.
Nazek Audi Hariri: Member (non-executive)
Basile Yared, ESQ: Member- Vice-chairman, Chairman of the Audit Committee
(independent)
Raya Haffarel El-Hassan: Member (independent)
Mayya Dabbagh: Chairman of the Corporate Governance and nomination
committee (independent)
Slim Chanine, PHD: Member, Chairman of the Compliance and AML/CFT
committee (independent)
Philip Khoury: Member, Chairman of the remuneration committee (independent)
Vasileios Psaltis, PHD: Member, chairman of the risk committee (independent)
GROUPMED S.A.L. (HOLDING): Member (non-executive)
Maroun Asmar: Member
The Board of Directors is composed of nine real members with the majority
represented by eight members, are as follows: six are independent members
and two are non-executive members. Knowing that it is not required by local
regulations to separate the roles of the Chairman and the General Manager
Mohammed Hariri: Chairman of the Board of Directors and General Manager.
Nazek Audi Hariri: Member (non-executive)
Basile Yared, ESQ: Member- Vice-chairman, Chairman of the Audit Committee
(independent)
Raya Haffarel El-Hassan: Member (independent)
Mayya Dabbagh: Chairman of the Corporate Governance and nomination
committee (independent)
Slim Chanine, PHD: Member, Chairman of the Compliance and AML/CFT
committee (independent)
Philip Khoury: Member, Chairman of the remuneration committee (independent)
Vasileios Psaltis, PHD: Member, chairman of the risk committee (independent)
GROUPMED S.A.L. (HOLDING): Member (non-executive)
Maroun Asmar: Member
The Board of Directors is composed of nine real members with the majority
represented by eight members, are as follows: six are independent members
and two are non-executive members. Knowing that it is not required by local
regulations to separate the roles of the Chairman and the General Manager
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(CEO), the Board has nominated a separate senior Executive General Manager
(EGM) to carry out many of the executive responsibilities vested in the General
Manager’s role in order to achieve the appropriate checks and balances.
We can state that the bank has a well organized structure where the Board of
Directors is fully concerned about the development of the Bank's overall business
strategy and the decisions made by senior management in the pursuit of
strategic objectives. BOD oversees strategies by assessing its appropriateness
and probability, also the extent of its success. The composition of the BOD was
conceived in such a way permitting a complete objectivity of the monitoring and
revision of activities, also enabling the members to allocate the necessary time
and effort to fulfill their responsibilities.
4.1.2. The Board Committees
Audit Committee, Risk Committee, Remuneration Committee, Compliance and
AML/CFT Committee, as well as Corporate Governance and Nomination
Committee.
The audit committee has to assists the BOD in the proper discharge of its duties
and ensures compliance with applicable laws and regulations.
The risk committee has to assists the BOD in fulfilling its tasks and supervisory
role in properly applying the Bank’s risk management framework in compliance
with regulation issued by BDL and the banking control commission of Lebanon.
The remuneration committee aims to set remuneration principles and standards
for Bankmed’s employees of all levels. This committee survey on the
implementation of remuneration principles and remuneration framework.
The compliance committee has to support the BOD in fighting against money
laundering and terrorist financing by making appropriate decision about it.
The corporate governance and nomination committees oversee the governance
of the Bank.
(EGM) to carry out many of the executive responsibilities vested in the General
Manager’s role in order to achieve the appropriate checks and balances.
We can state that the bank has a well organized structure where the Board of
Directors is fully concerned about the development of the Bank's overall business
strategy and the decisions made by senior management in the pursuit of
strategic objectives. BOD oversees strategies by assessing its appropriateness
and probability, also the extent of its success. The composition of the BOD was
conceived in such a way permitting a complete objectivity of the monitoring and
revision of activities, also enabling the members to allocate the necessary time
and effort to fulfill their responsibilities.
4.1.2. The Board Committees
Audit Committee, Risk Committee, Remuneration Committee, Compliance and
AML/CFT Committee, as well as Corporate Governance and Nomination
Committee.
The audit committee has to assists the BOD in the proper discharge of its duties
and ensures compliance with applicable laws and regulations.
The risk committee has to assists the BOD in fulfilling its tasks and supervisory
role in properly applying the Bank’s risk management framework in compliance
with regulation issued by BDL and the banking control commission of Lebanon.
The remuneration committee aims to set remuneration principles and standards
for Bankmed’s employees of all levels. This committee survey on the
implementation of remuneration principles and remuneration framework.
The compliance committee has to support the BOD in fighting against money
laundering and terrorist financing by making appropriate decision about it.
The corporate governance and nomination committees oversee the governance
of the Bank.
It’s important to share that the committees meet regularly with the Heads of
internal audit, risk and financial control in order to review policies and check their
results. The quality of corporate governance is constantly assessed based on the
reviewed results of the activities at the Bank made by all control units and also by
the Bank’s independent examiners.
4.1.3. Sound governance
Bankmed emphasizes a set of fundamental principles that includes:
- Protecting shareholders' rights
- Respecting and treating equitably the interests of all shareholders
- Defining the responsibilities of the Board of directors and the executive
management
- Pursuing a policy of full disclosure, transparency, sound practices, as well as
empowering the functions of internal and external auditors and other banking
supervisors
- The BOD appoints senior and executive managers for key positions in the
Bank and ensures that these managers have the necessary skills and knowledge
to manage their divisions as well as the appropriate control over the key
individual in those areas
4.2. System
The bank is structured by divisions and branches. Divisions are divided into
many departments; those departments are divided into sections. Each branch
has its own manager and officer manager. The work is divided into three
categories; teller, customer service, and operation support. We can affirm that
there is a good distribution of task, where everyone can fulfill his work in a right
way.
internal audit, risk and financial control in order to review policies and check their
results. The quality of corporate governance is constantly assessed based on the
reviewed results of the activities at the Bank made by all control units and also by
the Bank’s independent examiners.
4.1.3. Sound governance
Bankmed emphasizes a set of fundamental principles that includes:
- Protecting shareholders' rights
- Respecting and treating equitably the interests of all shareholders
- Defining the responsibilities of the Board of directors and the executive
management
- Pursuing a policy of full disclosure, transparency, sound practices, as well as
empowering the functions of internal and external auditors and other banking
supervisors
- The BOD appoints senior and executive managers for key positions in the
Bank and ensures that these managers have the necessary skills and knowledge
to manage their divisions as well as the appropriate control over the key
individual in those areas
4.2. System
The bank is structured by divisions and branches. Divisions are divided into
many departments; those departments are divided into sections. Each branch
has its own manager and officer manager. The work is divided into three
categories; teller, customer service, and operation support. We can affirm that
there is a good distribution of task, where everyone can fulfill his work in a right
way.
4.3. Strategies
A conservative strategy recognizing the importance of adhering to strong
governance which define policies, manage risks, set progression goals,
and foster sustainable growth.
A focus on professional development of its staff, believing that the way
people attain their goals is essential to the long-term sustainability of the
bank business.
Supporting youth in their educational career paths (Bankmed concluded
its first online trading university competition)
Further expand its client base and take advantage of new innovations and
technologies in order to better serve them.
4.4. Skills
The blend of management skills with employee orientation and employee skills
with organizational loyalty is unique to Bankmed. It encourage the constant
training of its staff, those training are constantly modified and updated in order to
meet the evolving world of business. Employees have to pass exams related to
BDL focusing on risk management, code of ethics, and compliance.
4.5. Style
The conduct of operations as well as administration at each operational unit has
its own effective internal control.
Every division head, department head, and branch manager has its own style of
functioning individually, but the main concern of the bank is keeping a high
profile.
A conservative strategy recognizing the importance of adhering to strong
governance which define policies, manage risks, set progression goals,
and foster sustainable growth.
A focus on professional development of its staff, believing that the way
people attain their goals is essential to the long-term sustainability of the
bank business.
Supporting youth in their educational career paths (Bankmed concluded
its first online trading university competition)
Further expand its client base and take advantage of new innovations and
technologies in order to better serve them.
4.4. Skills
The blend of management skills with employee orientation and employee skills
with organizational loyalty is unique to Bankmed. It encourage the constant
training of its staff, those training are constantly modified and updated in order to
meet the evolving world of business. Employees have to pass exams related to
BDL focusing on risk management, code of ethics, and compliance.
4.5. Style
The conduct of operations as well as administration at each operational unit has
its own effective internal control.
Every division head, department head, and branch manager has its own style of
functioning individually, but the main concern of the bank is keeping a high
profile.
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4.6. Staff
The number of staff reached 2658 in the end of 2016. The staffs are well
educated, well formed and up to date with the changes occurring.
Human resources at Bankmed are manages in an ethical and transparent
manner giving to each and everyone equal opportunities without any
discrimination of any king. It always ensures that the staffs perform their duties
conscientiously and honestly in accordance to the bank sound corporate
governance.
All employees are required to notify their supervisors and may be punished if
they are informed but hide any potential conflict of interest with the Bank or any
operational fraud.
4.7. Shared values
Mission
“We, at Bankmed, remain committed to our core principles that stem from a
sound corporate governance, solid financial stability, sustainable growth, as well
as an uncompromising commitment to customer service.
Bankmed’s priority is very clear: placing our customers at the heart of everything
we do is our prime mission. Within this context, we constantly evaluate our
strategies and modify our approaches to business, attending carefully to our
customers’ needs and providing them with a comprehensive suite of financial
solutions that match their dynamic lifestyles.” (From
https://www.bankmed.com.lb/content/about/message.aspx )
Culture
Bankmed relies on a strong culture of customer service that is clear at the level
of the branches, internet, via call-centre.
"It is a culture that puts the customer first, regardless of its financial size or need,
really sets Bankmed apart from the competitions" says Mr. Beyhum.
The number of staff reached 2658 in the end of 2016. The staffs are well
educated, well formed and up to date with the changes occurring.
Human resources at Bankmed are manages in an ethical and transparent
manner giving to each and everyone equal opportunities without any
discrimination of any king. It always ensures that the staffs perform their duties
conscientiously and honestly in accordance to the bank sound corporate
governance.
All employees are required to notify their supervisors and may be punished if
they are informed but hide any potential conflict of interest with the Bank or any
operational fraud.
4.7. Shared values
Mission
“We, at Bankmed, remain committed to our core principles that stem from a
sound corporate governance, solid financial stability, sustainable growth, as well
as an uncompromising commitment to customer service.
Bankmed’s priority is very clear: placing our customers at the heart of everything
we do is our prime mission. Within this context, we constantly evaluate our
strategies and modify our approaches to business, attending carefully to our
customers’ needs and providing them with a comprehensive suite of financial
solutions that match their dynamic lifestyles.” (From
https://www.bankmed.com.lb/content/about/message.aspx )
Culture
Bankmed relies on a strong culture of customer service that is clear at the level
of the branches, internet, via call-centre.
"It is a culture that puts the customer first, regardless of its financial size or need,
really sets Bankmed apart from the competitions" says Mr. Beyhum.
“We believe that fostering teamwork and nurturing the skills of all employees
generate innovative thinking and promote business continuity.
Our human capital is the driving force for Bankmed’s continued success. In
recognition of this asset, we strive to create a healthy work environment to keep
our staff motivated and able to rise to challenges to grow professionally and
personally. We boost our services and activities in order to match the aspirations
of our staff, while keeping pace with the fast changing model of the Lebanese
and international business. Our culture is marked by openness, transparency,
respect, accountability, teamwork, as well as entrepreneurship and creativity.
Through our open door policy, we demonstrate a respectful attitude toward our
staff’s perspectives, while nurturing open communication and transparency.
At Bankmed, we operate according to our corporate signature, “You! Count” This
aspect defines the way we do business at the Bank, and we take pride in our
customer-oriented culture as we respond promptly to their needs and cater fully
to individuals and large corporations.
We, therefore, seek to employ individuals, who are characterized by loyalty,
confidence, and commitment, and are able to share our values and vision of
excellence.”
From (https://www.bankmed.com.lb/content/career/life-bankmed.aspx)
generate innovative thinking and promote business continuity.
Our human capital is the driving force for Bankmed’s continued success. In
recognition of this asset, we strive to create a healthy work environment to keep
our staff motivated and able to rise to challenges to grow professionally and
personally. We boost our services and activities in order to match the aspirations
of our staff, while keeping pace with the fast changing model of the Lebanese
and international business. Our culture is marked by openness, transparency,
respect, accountability, teamwork, as well as entrepreneurship and creativity.
Through our open door policy, we demonstrate a respectful attitude toward our
staff’s perspectives, while nurturing open communication and transparency.
At Bankmed, we operate according to our corporate signature, “You! Count” This
aspect defines the way we do business at the Bank, and we take pride in our
customer-oriented culture as we respond promptly to their needs and cater fully
to individuals and large corporations.
We, therefore, seek to employ individuals, who are characterized by loyalty,
confidence, and commitment, and are able to share our values and vision of
excellence.”
From (https://www.bankmed.com.lb/content/career/life-bankmed.aspx)
5. SWOT Analysis
Bankmed
Parent Company Bankmed
Category Regional Banks
Sector Banking and Financial Services
Tagline/ Slogan YOU! Count
USP
One of the most prominent Banks in Lebanon with
International presence
STP
Segment
Commercial and corporate banking, retail and
individual banking, on-line brokerage, private banking,
investment banking, treasury, money and capital
markets, and asset management
Target Group Individuals, small, medium and large businesses, HNIs
Positioning
Full-fledged regional bank with a presence in 6
countries
Competitors
• Bank Audi
• BLOM Bank
• Bank of Beirut
• SGBL
• Byblos
Bankmed
Parent Company Bankmed
Category Regional Banks
Sector Banking and Financial Services
Tagline/ Slogan YOU! Count
USP
One of the most prominent Banks in Lebanon with
International presence
STP
Segment
Commercial and corporate banking, retail and
individual banking, on-line brokerage, private banking,
investment banking, treasury, money and capital
markets, and asset management
Target Group Individuals, small, medium and large businesses, HNIs
Positioning
Full-fledged regional bank with a presence in 6
countries
Competitors
• Bank Audi
• BLOM Bank
• Bank of Beirut
• SGBL
• Byblos
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5.1. Strengths
Bankmed is the 5th largest bank in Lebanon.
It received lots of awards and recognition, i.e. the best banking group,
Lebanon (2012-2014 & 2016) and the most sustainable bank, Lebanon
(2011-2014 & 2016) from the World Finance Banking Award. Also it has
received the best investment bank (2009-2014) and the best trade finance
bank (2016) from the Global Financial Award. Additional to that, the award
of financial inclusion program of the year 2016 from the prepaid for UN
relief and works agency, and the best customer service from the banker
Middle East 2015.
Total assets of Bankmed have grown over the years to comprise around
10% of the total of the Lebanese banking system today.
Bankmed has one of the largest branch networks in Lebanon with 131
local ATMs, 66 local branches.
Bankmed has expanded its regional presence with five overseas
branches, and six banking subsidiaries.
First bank in the MENA region operating under category 1 license.
Well diversified business model, highest level of governance, and
strategies that focus on clients' needs.
One of the major strength of Bankmed according to Deloitte & Touche and
Ernst & Young is its strong and transparent balance sheet.
Bankmed is taking the lead in Lebanon in the global fight against climate
change and global warming. BankMed’s most notable environmental
sustainability initiative is its project to become the first Lebanese Bank to
be certified as carbon neutral.
Bankmed is one of the banks having the longest working hours and
additional services offering at ATM’s which attracts customers.
Marketing and advertising strategies of Bankmed have good reach
compared to other banks in Lebanon
Bankmed is the 5th largest bank in Lebanon.
It received lots of awards and recognition, i.e. the best banking group,
Lebanon (2012-2014 & 2016) and the most sustainable bank, Lebanon
(2011-2014 & 2016) from the World Finance Banking Award. Also it has
received the best investment bank (2009-2014) and the best trade finance
bank (2016) from the Global Financial Award. Additional to that, the award
of financial inclusion program of the year 2016 from the prepaid for UN
relief and works agency, and the best customer service from the banker
Middle East 2015.
Total assets of Bankmed have grown over the years to comprise around
10% of the total of the Lebanese banking system today.
Bankmed has one of the largest branch networks in Lebanon with 131
local ATMs, 66 local branches.
Bankmed has expanded its regional presence with five overseas
branches, and six banking subsidiaries.
First bank in the MENA region operating under category 1 license.
Well diversified business model, highest level of governance, and
strategies that focus on clients' needs.
One of the major strength of Bankmed according to Deloitte & Touche and
Ernst & Young is its strong and transparent balance sheet.
Bankmed is taking the lead in Lebanon in the global fight against climate
change and global warming. BankMed’s most notable environmental
sustainability initiative is its project to become the first Lebanese Bank to
be certified as carbon neutral.
Bankmed is one of the banks having the longest working hours and
additional services offering at ATM’s which attracts customers.
Marketing and advertising strategies of Bankmed have good reach
compared to other banks in Lebanon
High liquidity and increasing deposits.
Bankmed has the minimum amount of nonperforming assets due to its
conservative policies. The ratio of Loan Loss Provisions to Non-performing
Loan has been decreasing since 2013 (202.40%) reaching 101.60% in
2016.
5.2. Weaknesses
Customer service of Bankmed is not performing well in terms of resolving
complaints; they focus instead on achieving the target fixed by the Bank's
management.
The bank service charges are comparatively higher
The employees of Bankmed are in maximum stress because of the
aggressive policies of the management to win ahead in the race. This may
result in less productivity in future years
Performance ratios decreased at the end of 2016 comparing to the end of
2015 (Net profit/Equity capital decreased by 0.73%, Net profit/Total assets
by 0.08%, and Equity capital/Total assets by 0.13%).
Profits have decreased at the end of 2016 comparing to the end of 2015
(Net profit 2016: US$130,072,335, Net profit 2015: US$139,411,450).
In spite of international presence, Bankmed major operations are in
Lebanon
High loan rates and very conservative policies.
Focusing on corporate loans instead of having a well diversified loan
portfolio.
Bankmed has the minimum amount of nonperforming assets due to its
conservative policies. The ratio of Loan Loss Provisions to Non-performing
Loan has been decreasing since 2013 (202.40%) reaching 101.60% in
2016.
5.2. Weaknesses
Customer service of Bankmed is not performing well in terms of resolving
complaints; they focus instead on achieving the target fixed by the Bank's
management.
The bank service charges are comparatively higher
The employees of Bankmed are in maximum stress because of the
aggressive policies of the management to win ahead in the race. This may
result in less productivity in future years
Performance ratios decreased at the end of 2016 comparing to the end of
2015 (Net profit/Equity capital decreased by 0.73%, Net profit/Total assets
by 0.08%, and Equity capital/Total assets by 0.13%).
Profits have decreased at the end of 2016 comparing to the end of 2015
(Net profit 2016: US$130,072,335, Net profit 2015: US$139,411,450).
In spite of international presence, Bankmed major operations are in
Lebanon
High loan rates and very conservative policies.
Focusing on corporate loans instead of having a well diversified loan
portfolio.
5.3. Opportunities
The concept of saving in banks and investing in financial products is
increasing in Lebanon.
The regular supply of trained human power in financial products and
banking services is increasing.
Small and non performing banks can be acquired by Bankmed because of
its financial strength and the strict regulatory requirement of BDL.
Increasing in client borrowing, Bankmed is expected to have a higher
credit growth percentage in the upcoming years.
Expansion in the developing nations.
Focusing on high-growth and sub-segment
5.4. Threats
Leading banks in Lebanon; Audi Bank, BLOM Bank and Byblos Bank
impose a major threat.
Though customer acquisition is high on one side, the unsatisfied
customers are increasing and make them to switch to other banks.
Growing competition in the Middle East
Fluctuating global economy and recession
The critical political situation may affect the bank profits, and increase the
risks (Credit risk, market risk, operational, and liquidity).
The compliance to international regulatory framework for banks will lead to
more conservative policies which will cause less profitability. (BDL stated
that banks of Lebanon will be applying the EVRST 9 in 2018).
The decrease of real money available with the customer as a result of
declining tourism and real estate, would affect the money available with
the bank.
The rising number of Trojans in the internet market can pose a problem
since Bank med is providing a lot of banking service.
Despite being a relatively free economy, foreign direct investments are
hampered by bureaucracy, corruption and high taxes.
The concept of saving in banks and investing in financial products is
increasing in Lebanon.
The regular supply of trained human power in financial products and
banking services is increasing.
Small and non performing banks can be acquired by Bankmed because of
its financial strength and the strict regulatory requirement of BDL.
Increasing in client borrowing, Bankmed is expected to have a higher
credit growth percentage in the upcoming years.
Expansion in the developing nations.
Focusing on high-growth and sub-segment
5.4. Threats
Leading banks in Lebanon; Audi Bank, BLOM Bank and Byblos Bank
impose a major threat.
Though customer acquisition is high on one side, the unsatisfied
customers are increasing and make them to switch to other banks.
Growing competition in the Middle East
Fluctuating global economy and recession
The critical political situation may affect the bank profits, and increase the
risks (Credit risk, market risk, operational, and liquidity).
The compliance to international regulatory framework for banks will lead to
more conservative policies which will cause less profitability. (BDL stated
that banks of Lebanon will be applying the EVRST 9 in 2018).
The decrease of real money available with the customer as a result of
declining tourism and real estate, would affect the money available with
the bank.
The rising number of Trojans in the internet market can pose a problem
since Bank med is providing a lot of banking service.
Despite being a relatively free economy, foreign direct investments are
hampered by bureaucracy, corruption and high taxes.
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Economic growth has significantly subsided in recent years from 7% to
less than 2% due many reasons. (Decrease in tourism sector, decrease in
foreign direct investments, decrease in commercial sector etc...)
Lebanon depends on foreign aids in order to undergo reforms and
strengthen the economy. Knowing that the major amount of aids comes
from the KSA, also that political tension between the two countries started
lately, Lebanon may face difficulties in the upcoming years.
less than 2% due many reasons. (Decrease in tourism sector, decrease in
foreign direct investments, decrease in commercial sector etc...)
Lebanon depends on foreign aids in order to undergo reforms and
strengthen the economy. Knowing that the major amount of aids comes
from the KSA, also that political tension between the two countries started
lately, Lebanon may face difficulties in the upcoming years.
2.1. Exploiting the SWOT analysis
matrix External
Opportunities Threats
- Expansion in developing
nations.
- Increase of trained human
power.
- Concept of saving in banks
increasing.
- Acquirement of non
performing banks.
- Increase in client borrowing.
- High-growth and sub-
segment.
-Political, and economic
situation
-Unsatisfied customers
-Competition with other
banks and competition in
the Middle east.
-Compliance with
international rules.
- Decrease of real money
available with customers.
-Rising number of Trojans
in the internet market.
-Economic growth
decreasing.
- Bureaucracy, corruption
and high taxes.
-Lebanon depends on
foreign aids.
Strengths Offensive Reactivation
Strategies
- 5th largest bank in Lebanon.
- Rewards and recognition.
- Assets growing.
- Regional presence.
- One of the largest branch networks.
- High liquidity, increase in deposits.
- First in the MENA operating under
category 1 license.
- Business model, level of
governance, and strategies.
-transparent balance sheet.
- Leading in environmental initiatives.
- Working hours, and ATM's services.
- Marketing & advertising strategies.
- Minimum amount of nonperforming
loan.
Focus on the training of
employees and manage to
keep them well-trained as
they are a vital asset in
generating innovative ideas.
Use the marketing and
advertising strategies in order
to reach the high-growth and
sub-segment.
Diversification will help reach
long-range financial goals
while minimizing the risks.
Organize external activities
to help employees increase
their productivity.
Make an ongoing effort to
find the best strategies in
order to enter new markets.
Personalize the products
and services in order to
create a superior value than
competitors.
Weaknesses Adjustment Defensive
Strategie
-Renew the products while
matrix External
Opportunities Threats
- Expansion in developing
nations.
- Increase of trained human
power.
- Concept of saving in banks
increasing.
- Acquirement of non
performing banks.
- Increase in client borrowing.
- High-growth and sub-
segment.
-Political, and economic
situation
-Unsatisfied customers
-Competition with other
banks and competition in
the Middle east.
-Compliance with
international rules.
- Decrease of real money
available with customers.
-Rising number of Trojans
in the internet market.
-Economic growth
decreasing.
- Bureaucracy, corruption
and high taxes.
-Lebanon depends on
foreign aids.
Strengths Offensive Reactivation
Strategies
- 5th largest bank in Lebanon.
- Rewards and recognition.
- Assets growing.
- Regional presence.
- One of the largest branch networks.
- High liquidity, increase in deposits.
- First in the MENA operating under
category 1 license.
- Business model, level of
governance, and strategies.
-transparent balance sheet.
- Leading in environmental initiatives.
- Working hours, and ATM's services.
- Marketing & advertising strategies.
- Minimum amount of nonperforming
loan.
Focus on the training of
employees and manage to
keep them well-trained as
they are a vital asset in
generating innovative ideas.
Use the marketing and
advertising strategies in order
to reach the high-growth and
sub-segment.
Diversification will help reach
long-range financial goals
while minimizing the risks.
Organize external activities
to help employees increase
their productivity.
Make an ongoing effort to
find the best strategies in
order to enter new markets.
Personalize the products
and services in order to
create a superior value than
competitors.
Weaknesses Adjustment Defensive
Strategie
-Renew the products while
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