Top Banks in Libya

Marcopolis.net presents top banks in Libya.

Prior to the 2011 revolution that resulted in the overthrow of long-term dictator, virtually the entire banking sector in Libya was dominated by the state-run banks, with partial privatization of Sahara Bank and Wahda Bank. After the revolution, the banking sector in Libya still dominated by the state-owned banks.

There are about 16 banks in Libya majority owned by the government, followed by 24 representatives offices of foreign banks. Most of the banks are state owned (8) with the reminder  state being majority shareholder.

The Central Bank's policy is that any licenses issued to any foreign banks to operate in Libya had to be in partnership with a Libyan bank. The CB has the sole authority for issuing licenses. The priorities for the banking reform is to improve the infrastructure, strengthen the regulatory framework, and increase the human capacity.  

According to the website FinanceMalta, "An Islamic banking law has been approved and this will introduce Sharia-compliant banking within the country. The restructuring of the banking sector will depend on authorities pursuing the enhancement of the monetary policy framework as well as the privatization of commercial banks."

According to the Economist, "The commercial banking sector is dominated by four banks - Jumhouria Bank, the National Commercial Bank, Wahda Bank and Sahara Bank. Together they accounted for 86% of total assets, 87.2% of total deposits and 88.9% of total credit at end-September. Jumhouria Bank alone accounted for 38.8% of commercial banking assets, 42.7% of deposits and 40.7% of loans."

The banking sector in Libya employs over 20,000 people and is experiencing growth rates in excess of 15% per annum. Despite the growth rate, the banking sector contribution to the GDP remains negligible. The future outlook remains positive on the backdrop of project finance in reconstruction of the country and gradual increase in sophistication of the banking services.

Financial sector reform has also progressed with partial interest rate liberalization. Interest rates have been liberalized on deposits, while a lending rate ceiling has been set above the discount rate. 

The make-up of the sector is likely to change as Libya moves towards increasing the role of Islamic banking. The General National Congress (parliament) is preparing a law that would abolish interest rates on all bank loans. However, conventional interest rates would probably be replaced by profit rates, which are agreed in advance of a transaction by both parties and are commonly used in Islamic banking.

Furthermore, the Economist reported, "New data from the Central Bank of Libya show that total lending by commercial banks grew by 19.7% year on year to LD15bn (US$11.7bn) in January-September.

Total banking assets rose by 11.1% to LD76.2bn at end-September with liquid assets accounting for 69% of this. More than half of these, LD32.9bn, were in the form of certificates of deposit with the Central Bank. Meanwhile, total deposits increased to LD60.8bn from LD55.8bn over the same period with private-sector deposits accounting for 45.2% of the total.

Growth in deposits and assets appeared to have been outweighed by credit expansion as banking sector ratios improved slightly, with the loan/deposit and loan/asset ratios rising to 24.6% and 19.7%, respectively."

Top Banks in Libya (Largest banks in Libya acc. to assets)

 Jumhouria Bank
Jumhouria Bank is the largest bank in Libya and was the result of a merger between Al Ummah Bank and Jumhouria Bank. The bank has about 1 billion Libyan dinar in paid capital, and the total assets for 2012 range from about 33 billion Libyan dinar on the balance sheet to about 12 billion dinar off the balance sheet, for a total of about 44 billion Libyan dinar. The bank grows by 15% YOY and operates a nationwide network of 150 branches. Jumhouria Bank is the largest employer in the banking sector with 6000 employees. Jumhouria Bank alone accounted for 38.8% of commercial banking assets, 42.7% of deposits and 40.7% of loans.

Assets: US$ 25 billion (unaudited)

 National Commercial Bank
NCB is one of the largest commercial banks in Libya fully owned by the CBL. The bank operates a nationwide network of 64 (2009) branches mainly in Tripoli and Benghazi.

Assets: US$ 8 Billion - 2010 (estimate)

 Sahara Bank
Sahara Bank is the 3rd largest bank in Libya. It holds a market share of 17% for loans and 22% for deposits. Its customers, whom it serves through a network of 48 agencies distributed throughout the country, include large national companies, private enterprises (both Libyan and foreign), and over 300,000 private or professional clients.

BNP Paribas has been chosen by the Libyan authorities to become the strategic partner of Sahara Bank, the first privatized bank in Libya. After obtaining all authorizations required by regulation, BNP Paribas acquired 19% of Sahara Bank's capital on September 18, 2007. This assumption of a shareholder interest is taking place in accordance with the agreement signed on July 25 with the Social Economic Development Fund, and will allow BNP Paribas to increase its holding to 51% of the share capital within three to five years. The agreement allows for managerial control of the bank.

Assets: US$ 7,7 - 2009

 Wahda Bank
Wahda bank is a Libyan share - holding company, Established under the law (153) dated 22/12/1970, paid capital is (108)million LYD, the social economic development fund owns (54.1) % of the stocks, the private sector owns (26.90)%  , Arab  bank  (The strategic partner) owns (19) %.  

Al Wahda Bank is Libya's fifth largest bank with total assets of USD 6.32 billion and 78 branches across the country. The Bank is licensed to carry out all commercial banking activities. During early 2008, Arab Bank plc acquired 19% of Al Wahda Bank with the right to increase its share to 51% within a period of 3 – 5 years. Arab Bank plc has the majority in the Board of directors and controls the management of Al Wahda Bank, including the appointment of the CEO. During 2010, the Bank increased its capital from LYD 108 million to LYD 432 million through the capitalization of LYD 108 million and the issuance of shares of a private placement by LYD 216 million; the share price of the private placement was issued in nominal value of the share of LYD 10.

Assets: US$ 6,32 billion

Top Specialized Banks in Libya (Largest specialized banks in Libya acc. to assets)

 The Libyan Foreign Bank (LFB)
The Libyan Foreign Bank (LFB) was established in 1972 in Tripoli, Libya as the country's first offshore banking institution licensed to operate internationally. The bank is 100% owned by the Central Bank of Libya. Since 2010, the bank owns 84% of British Arab Commercial Bank and 68% of Banca UBAE (Est. 1972) in Rome.

The extraordinary general assembly meeting of shareholders of LFB decided in its meeting dated 21/02/2010 to increase its capital with another 1 billion USD as per decision No.2 for the year 2010 and with this increase the paid up capital of LFB amounts to 3 billion USD with an authorized capital of 8.7 billion USD divided into 87 million shares at a value of 100 USD per share.

Assets: US$ 18 billion - 2012

The Regulator (Central Bank of Libya)

 Central Bank of Libya (CBL)
Central Bank of Libya (CBL) is the monetary authority in Libya and enjoys the status of autonomous corporate body. The law establishing the CBL stipulates that the objectives of the central bank shall be to maintain monetary stability in Libya, and to promote the sustained growth of the economy in accordance with the general economic policy of the state.