BLOM Bank SAL : Statement by the General Management of BLOM BANK

« Back Statement by the General Management of BLOM BANK

14 March 2022

Following up on the conflicting news circulated on various communication and social media platforms, BLOM BANK's General Management would like to make clear the following points:

1) The loan in USD granted by BDL to BLOM BANK at the beginning of the crisis was almost totally due to domestic transfers, used primarily by clients to buy real estate or to repay back loans. Consequently, it was not due to transfers abroad, as was proclaimed recently on communication and social media outlets. Worth to note, that BLOM BANK's USD deposits at BDL are several times that loan.

2) Transfers abroad allowed by BDL in the beginning of the crisis till 9/3/2020 (the date of the government's default of foreign debt) were very limited, and were calculated according to a special BDL criterion that was in turn based on the size of each bank's deposits at BDL and the interest earned on these deposits. And these transfers were solely used for urgent humanitarian purposes (e.g. education and medical treatment abroad).

3) BLOM BANK abided totally by ABL's decisions to restrict foreign transfers to urgent personal and humanitarian needs only (e.g. education and medical treatment abroad). As a result, and for the sake of ensuring fairness and equal treatment, BLOM BANK didn't undertake any transfer of deposits abroad to members of its management, to shareholders, to politicians, or to any related parties.

4) All income made by BLOM BANK from BDL's "financial engineering" transactions were strictly used to increase the Bank's shareholders' equity in LBP and none was distributed as dividends, as was required by BDL's circular in this matter.

5) Since the beginning of the crisis, BLOM BANK have urged repeatedly the highest ranking officials to enact a capital control law so as to protect foreign reserves and to avoid discretionary practices among clients concerning foreign transfers; as all countries who went through crises similar to Lebanon have done. In this respect, the Bank continues to strongly believe that a capital control law is a fundamental gateway towards solving the Lebanese financial crisis; and so is an agreement with the IMF and the implementation of structural reforms.

6) BLOM BANK Group is among the most financially conservative banking groups in the region. Its prudent banking practices have always maintained high and clean standards of conduct throughout the countries in which it is present (Egypt, Jordan, KSA, Qatar, and UAE; France, Switzerland, England, Cyprus, and Romania). This is a direct outcome of BLOM BANK's sound management, an outcome that applies equally to the entire Lebanese banking sector. The latter, contrary to its long-held tradition, was forced to impose exceptional measures, not because of its bad management but because of the bad management of the country including the management of the current economic and financial crisis.

7) BLOM BANK's management has partaken in a very positive and transparent way in the investigation conducted last week by Judge Ghada Aoun. In fact, Judge Aoun commended BLOM BANK's management for providing convincing explanations and proofs on all matters relating to the investigation. In this context, BLOM BANK would like to affirm that it has always stood under the law and that it will be extremely cooperative with the investigation currently underway.

8) The banking sector is an essential pillar of any economy; and protecting this sector from defamation and false accusations is actually protecting the national economy and its vital interests.