Four Banks Reportedly Eye Standard Chartered's Lebanon Assets

Bank Audi sal - Audi Saradar Group (LSE:BQAD); First National Bank S.A.L.; IBL Bank SAL; and Cedrus Invest Bank sal are vying to acquire the license and assets of Standard Chartered PLC (LSE:STAN) in Lebanon with strong indications that the winner would be determined in less than two weeks, bankers said on Jnaury 9, 2014. Standard Chartered has expressed interest in selling its retail business in Lebanon and to open instead a representative office in the country. The bank's total deposits are only around $80 million, a very small figure compared to deposits of other Lebanese lenders.

According to the bankers, who spoke on condition of anonymity, bidding had been confined to IBL, First National Bank and Cedrus Invest Bank, but Bank Audi made a last-minute offer to buy the retail operations of Standard Chartered in Lebanon. “Bank Audi is currently holding talks with the management of Standard Chartered and the Central Bank. Cedrus seemed to have a good chance to buy the license and assets of the bank until Audi decided to step in,” a banker said.

Sources said Cedrus could raise its capital if it wanted to acquire Standard Chartered's assets in Lebanon. Some bankers expressed their surprise at reports that Bank Audi had decided to make an offer for Standard Chartered. “Why would a large bank like Audi be interested in a small bank like Standard Chartered, whose total assets are less than $100 million?” asked one banker familiar with the negotiations.

He said the Central Bank would not only take the highest offer into consideration, but also the fate of the employees and the license. One source explained that Standard Chartered's shareholders equity is only $15 million. “The potential buyer will add the price of the license and the capital of the bank.

They [bidders] usually buy the equity and multiply them by 1.4 or 1.3,” the source said, declining to provide any estimates about the bank's true value. Insiders said Cedrus was keen to acquire the license and assets of Standard Chartered and expand its business to commercial banking.