Bank Audi sal : The 2024 Annual Report
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Beirut S.E.
2025-05-20
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2.740 USD
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Published on 05/26/2025 at 12:28
Annual
2024
Report
Annual Report 24
Annual Report 24
STATEMENT OF THE CHAIRMAN
Dear stakeholders,
The year 2024 witnessed a continuation of the challenges experienced in 2023-operational, legal, and economic-further exacerbated by military escalations that culminated, towards the end of the year, in significant local and regional geopolitical shifts.
These geopolitical shifts, accompanied by the reestablishment of full public governance through the election of a President of the Republic in early 2025 and the formation of a new government with promising agendas, mark, however, a comforting development and give us cautious optimism that a turning point may have been reached in the prolonged Lebanese crisis. Concrete solutions are now actively envisaged by the Government and public authorities. Yet, Lebanon’s path to recovery remains marked by uncertainties.
During 2024 and despite the ongoing challenges, we remained resolute in our commitment to navigating this complex environment with resilience and strategic discipline. With the unwavering support of the Board, management has pursued a prudent and disciplined strategy focused on strengthening operational integrity, enhancing financial resilience, and preparing the institution for the implementation of the restructuring and resolution plan.
4
During the year under review, we also implemented important enhancements in our governance structure. These changes were aimed at reinforcing the Board’s role in providing independent oversight of management’s execution of strategy, while maintaining a sharp focus on risk and compliance. Our commitment to transparency, integrity, and accountability remained steadfast, even amidst legal ambiguities and broader sector challenges. This commitment was further reinforced through changes in the composition of the Board and adjustments in the distribution of roles, which strengthened our collective expertise and bolstered the Board’s independent oversight capabilities.
Reflecting on the aforementioned challenges and achievements, I would like, on behalf of the Board of Directors, to extend my sincere gratitude to our employees, clients, and stakeholders at large. Your continued trust and support are instrumental in enabling the Bank to move forward with confidence and determination. We recognize that the absence of critical financial sector reforms remains a challenge for the entire industry, creating uncertainties that impact long-term planning and market confidence. We share these concerns and remain committed to navigating this environment with resilient governance and strategic focus.
I am confident that, together, we will emerge stronger and better positioned for the future.
Samir N. Hanna
Chairman of the Board
5
Annual Report 24
STATEMENT OF THE GROUP CHIEF EXECUTIVE OFFICER
Khalil I. El Debs
Group Chief Executive Officer
On the compliance front, the regulatory landscape in 2024 was significantly impacted by Lebanon’s inclusion
on the Financial Action Task Force’s (FATF) « Grey List, » presenting new challenges for compliance. Despite these pressures, Bank Audi remained steadfast in applying solid principles of transparency and due diligence. We focused on reinforcing our internal controls and ensuring that we continued to meet international compliance expectations. This was crucial for maintaining our relationships with global correspondent banks and ensuring the Bank’s ability to operate effectively in the international financial system.
In 2024, the Bank also continued its focus on Corporate Social Responsibility, adapting our initiatives to the prevailing circumstances. We continued to support our employees, providing assistance to those displaced by the war and strengthening our youth empowerment programs, which included the Audi Youth Summer Experience and internships for young people. While our efforts in this area were adjusted in response to the crisis, we remained committed to making a meaningful contribution to society.
Additionally, we continued our environmental sustainability initiatives, including efforts to reduce our carbon footprint and expand our recycling programs. These actions reflect our long-term commitment to sustainability and our responsibility to the communities we serve.
Looking ahead, while uncertainties persist, the Bank is well positioned to leverage any improvements in the external environment.
On behalf of management, I extend my deepest thanks to our clients, shareholders, regulators, partners, and above all, our employees-for their strength, integrity, and unwavering commitment during one of the most challenging years in our history.
With shared purpose, we look forward to better days ahead.
Respectfully,
Dear stakeholders,
As we reflect on the year 2024, it is clear that the environment in which Bank Audi operates remains profoundly complex and volatile. It was a year of extraordinary difficulty for Lebanon and for all who call it home. Already enduring the deep toll of a prolonged economic and financial crisis, our country was shaken once again by the eruption of the war in September. This conflict not only significantly impacted the country’s infrastructure, economy, and human capital but compounded the uncertainty that has weighed so heavily on Lebanese households, institutions, and businesses alike.
In this most trying of contexts, Bank Audi remained fully operational, and deeply committed to its stakeholders. We navigated the year with prudence, discipline, and with a perpetuation of our strategic repositioning, aiming at going through the prolonged period of economic uncertainty while fortifying our readiness for the eventual sectoral resolution. The Group’s overarching direction in 2024 revolved around eight key strategic priorities, ranging from executing our six going-concern pillars and launching neo, the first digital bank in Lebanon, to adapting agilely to regulatory changes and divesting from capital-intensive operations. A defining moment in this journey was the Bank’s decision to exit the Turkish market through the successful divestiture of Odea Bank to ADQ Financial Services LLC on 26 March 2025. These actions allowed us to ensure the long-term sustainability of the Bank and to continue as much as possible meeting its financial obligations, and supporting clients in the best efficient manner.
Despite having to contend with the prevailing systemic challenges, our Lebanese operations maintained stability, even as the absence of a credible national restructuring plan continued to strain the broader sector. This was achieved through tight cost discipline and careful balance sheet management. Encouragingly, early 2025 brought signs of political renewal and a potential path to reform, as evidenced by the formation of a technocratic government and a progress towards IMF engagement. We will continue to support reform, advocate for a viable restructuring framework, and prepare our institution for the day after the implementation of the resolution plan.
Internationally, the Bank’s operations in France, Switzerland, Qatar, and Saudi Arabia demonstrated solid performance. Of particular note was the consistent profitability of our Private Banking operations and the marked improvement in our Saudi entity following the adoption of a new growth strategy.
Our financial results reflect the disciplined execution of our strategy. Consolidated assets stood at USD 16.7 billion at year-end 2024, and while we reported zero consolidated net profits for the year, this was a direct consequence of our decision to allocate all pre-provision profits to provision for risk and charges- an approach that strengthens our balance sheet and fortifies our readiness for the banks’ resolution.
In tandem with financial prudence, the Bank has also made tangible progress in redefining its business model. In Lebanon, we continued transitioning toward a digital-first platform for individuals while consolidating our branch footprint to better serve high-net-worth and corporate clients.
Beyond the numbers, we continue to invest in the pillars that will shape our future.
In Human Resources, our commitment to supporting our people remains central to us. In the face of the crisis, we responded quickly to ensure the safety and well-being of our employees. With the war in September, we activated crisis protocols, including relocating staff from high-risk areas and providing them with necessary logistical and financial support. Our employees were at the heart of our response, and we worked to ensure they felt supported during an uncertain and difficult period.
Throughout the year, we also focused on fostering employee engagement and morale, organizing wellness initiatives and social events to maintain a sense of community and unity. These efforts were essential in ensuring that our team remained resilient and motivated, despite the external pressures. Looking ahead, we will continue to prioritize the health, well-being, and development of our workforce as we adapt to the evolving needs of the sector.
6 7
BANK AUDI AT A GLANCE
MAIN FINANCIAL INDICATORS IN 2024
2020 2021 2022 2023 2024 CAGR 20-24
Assets
35,431
26,857
26,926
18,566
16,665
-17.19%
Loans to customers
6,136
4,743
3,937
1,049
963
-37.07%
Customers’ deposits
21,528
20,101
19,381
12,806
12,416
-12.85%
Shareholders’ equity
2,951
2,492
4,017
1,738
955
-24.58%
Net earnings (loss) – published
-145
-184
-435
0
0
Normalized Net earnings(3)
519
722
683
234
183
-22.94%
Number of branches
125
115
112
91
84
-9.46%
Number of staff
3,931
3,176
3,059
3,136
2,805
-8.09%
Placements and loan quality
Placements with Central Bank and banks(1)/Deposits
97.42%
100.12%
88.58%
103.56%
105.35%
Loans to deposits
28.50%
23.59%
20.32%
8.19%
7.75%
Credit-impaired/Gross loans(2)
15.31%
13.33%
14.78%
25.87%
20.90%
Loan loss provisions/Credit-impaired
(including allowance for ECL Stages 1 & 2)
94.46%
115.06%
88.27%
88.00%
94.67%
Loan loss provisions/Credit-impaired (including real
guarantees and allowance for ECL Stages 1 & 2)
158.41%
141.16%
103.59%
95.85%
104.33%
Net credit-impaired/Equity
16.65%
9.98%
4.96%
4.13%
5.19%
Allowance for ECL Stages 1 & 2/Net loans
7.02%
7.61%
3.07%
2.94%
3.76%
Capital adequacy
Equity/Assets
8.33%
9.28%
14.92%
9.37%
5.73%
Common equity Tier 1 ratio
9.36%
10.04%
6.33%
8.46%
5.55%
Capital adequacy ratio
13.12%
14.52%
9.81%
9.54%
7.43%
Profitability (3)
Cost to income
44.22%
40.71%
49.02%
52.13%
44.8%
ROAA
1.40%
2.38%
2.64%
1.22%
1.08%
ROACE
21.69%
32.94%
40.99%
15.86%
18.39%
(1) Including CDs.
(2) After adoption of IFRS 9.
(3) Adjusted to the one-off flows from the outset of the financial crisis in Lebanon, excluding discontinued operations, before allocation of provisions.
(4) Excluding entities held for sale.
9
TABLE OF CONTENTS
Statement of the Chairman
5
Statement of the Chief Executive Officer
6
Financial Highlights
9
01
Corporate Governance
12
03
Financial Statements
68
1.0. Corporate Governance Framework
14
Resolutions Proposed by the Board of Directors to the Annual General Assembly of Shareholders
70
2.0. Shareholding Structure
15
Auditors’ Report
71
3.0. Corporate Structure
16
Consolidated Income Statement
78
4.0. Group High Level Chart
17
Consolidated Statement of Comprehensive Income
79
Board of Directors 18
Biographies of Board Members 20
Remuneration Policy and Practices 24
Consolidated Statement of Financial Position 80
Consolidated Statement of Cash Flow 81
Consolidated Statement of Changes in Equity 82
Notes to the Consolidated Financial Statements 84
Notes’ Index 85
Notes 86
02
Management Discussion and Analysis
26
04 Management 204
1.0. Bank Audi sal Management 206
1.0. Overview of Bank Audi sal
28
2.0. Entities’ Management 208
2.0. Strategy
29
2.1. Odea Bank A.Ş. – Turkey 208
3.0. Operating Environment
30
2.2. BAPB Holding Limited – Cyprus 209
4.0. Consolidated Financial Condition and Results of Operations
32
2.2.1. Banque Audi (Suisse) SA – Switzerland 210
4.1. Business Overview in 2024
32
2.2.2. Audi Capital (KSA) cjsc – Kingdom of Saudi Arabia 211
4.2. Consolidated Financial Overview in 2024
36
2.3. Other Entities 212
4.3. Results of Operations
52
2.3.1. Bank Audi LLC – Qatar 212
4.4 Earnings per Common Share and Common Book per Share
55
2.3.2. Bank Audi France sa – France 213
4.5. Principal Business Activities
56
2.3.3. SOLIFAC sal – Lebanon 214
5.0. Earnings Allocation
60
6.0. Risk Management
61
6.1. Evolution of the Group’s Risk Management Framework
61
6.2. Priorities for 2025
62
Credit Risk
ALM and Liquidity Risk Management
Non-financial Risks
62
62
63
05 Addresses 216
7.0. Deployed Resources
64
1.0.
Lebanon
218
7.1. Information Technology
64
Bank Audi sal
218
7.2. Human Resources Development
65
2.0.
Cyprus
218
8.0. Compliance
66
BAPB Holding Limited
218
9.0. Corporate Social Responsibility
67
3.0.
Switzerland
218
Banque Audi (Suisse) SA
218
4.0.
Saudi Arabia
218
Audi Capital (KSA) cjsc
218
Qatar
218
Bank Audi LLC
218
6.0.
France
218
Bank Audi France sa
218
7.0.
Lebanon
218
Solifac sal
218
01
Corporate
Governance
1.0. CORPORATE GOVERNANCE FRAMEWORK 2.0. SHAREHOLDING STRUCTURE
INTRODUCTION
The Board of Directors of Bank Audi aims at achieving the Group’s long-term success through the implementation of Governance practices that promote continuity, consistency, and effectiveness in the way the Board operates and governs the Bank.
In 2024, the Board continued to pay a particular attention to prudent and effective controls, in consideration of the heightened risks resulting from the fiscal and monetary crisis that persisted since the last quarter of 2019, in addition to its role of policy setting and of providing strategic guidance. Despite the impact of the said crisis on the Bank, and on all other banks and market players, and
GOVERNANCE FRAMEWORK
Bank Audi is governed by a Board of Directors consisting of up to 12members (currently 8) elected by the General Assembly of shareholders for terms not exceeding 3 years.
The roles of Chairman of the Board and General Manager – Chief Executive Officer are distinct. The Board is led by a Non-Executive Chair, who oversees corporate governance and ensures the Board’s effective functioning, while the General Manager – CEO is responsible for leading the company’s management, executing its strategy, and overseeing its operations.
The responsibility of the Board is to ensure strategic direction, management supervision and adequate control of the company, with the ultimate goal of increasing the long-term value of the Bank. Bank Audi’s Governance framework and that of its major banking subsidiaries encompass a number of policies, charters, and terms of reference that shape the Group’s Governance framework over a wide range of issues including risk supervision, compliance, AML/CFT, audit, remuneration, evaluation, succession planning, ethics and conduct, budgeting, and capital management. Clear lines of responsibility and accountability are in place throughout the organization with a continuous chain of supervision for the Group as a whole, including effective channels of communication of the Group Executive Committee’s guidance and core group strategy. Strategic objectives setting corporate values and promoting high standards of conduct have been established and widely communicated throughout the Group, providing appropriate incentives to ensure professional behavior.
The Bank’s Corporate Governance Guidelines are accessible on the Bank’s website at bankaudigroup.com
The Board is supported in carrying out its duties by the Audit Committee, the Risk Committee, the Remuneration Committee, the Compliance/AML/CFT Board Committee, the Corporate Governance and Nomination Committee, and the Executive Committee.
despite the additional pressing matters that showed up in 2024, the Bank continued its operations with integrity and in compliance with applicable laws and regulations.
The Board is thus satisfied that, during the period under review, it fully discharged all its responsibilities, as mapped in its yearly rolling agenda, and acted on the recommendations of its committees in a way to meet its obligations towards its shareholders and all other stakeholders. The Board is also satisfied that the Bank’s Governance framework conforms to applicable directives and guidelines, and is adapted to the Bank’s needs and high expectations of its stakeholders.
The mission of the Group Audit Committee is to assist the Board in fulfilling its oversight responsibilities as regards: (i) The adequacy of accounting and financial reporting policies; (ii) the integrity of the financial statements and the reliability of disclosures; (iii) the appointment, remuneration, qualifications, independence and effectiveness of the external auditors; and (iv) the independence and effectiveness of the internal audit function(1).
The mission of the Group Risk Committee is to assist the Board in discharging its risk-related responsibilities. The Committee is expected to: (i) consider and recommend the Group’s risk policies and risk appetite to the Board; (ii) monitor the Group’s risk profile for all types of risks; and (iii) oversee the management framework of the aforementioned risks, and assess its effectiveness.
The mission of the Remuneration Committee is to assist the Board in maintaining a set of values and incentives for Group executives and employees that are focused on performance and promote integrity, fairness, loyalty and meritocracy.
The mission of the Compliance/AML/CFT Board Committee is to assist the Board of Directors in its functions and supervisory role with respect to: (i) fighting money laundering and terrorist financing and understanding the related risks, and assisting it in making the appropriate decisions in this regard; (ii) protecting the Bank from other compliance-related risks and, more generally, overseeing the Bank’s compliance with applicable laws, policies and regulations.
The mission of the Corporate Governance and Nomination Committee is to assist the Board in maintaining an effective institutional and Corporate Governance framework for the Group, an optimal Board composition, and effective Board processes and structure.
The mission of the Group Executive Committee is to support the Group CEO in formulating policy and strategy proposals for the Board, providing leadership to management, promoting compliant execution of the Bank’s business, overseeing performance against KPIs and reporting thereon to the Board.
The following table sets out the composition of the holders of the Common Shares as at December 31, 2024:
Shareholders/Groups of Shareholders
Country (Ultimate Economic Ownership)
Percentage Ownership(1)
(%)
FRH Investment Holding SAL (2)
Lebanon
12.25
Sheikh Dheyab Bin Zayed Bin Sultan Al-Nahyan
United Arab Emirates
7.96
Al-Hobayb Family
Kingdom of Saudi Arabia
5.87
Audi Family(3)
Lebanon
5.01
Family of Late Sheikha Suad Hamad Al Saleh Al Homaizi
Kuwait
4.42
Akig Investment Holdings Ltd
Iraq
4.26
Phoenicia Enterprises S.A
Lebanon
3.37
Al-Sabah Family
Kuwait
3.21
European Bank for Reconstruction and Development – EBRD
–
2.90
Ali Ghassan El Merhebi Family
Lebanon
2.78
Kel Group
Lebanon
2.49
Mohammed Bin Dhoheyan Bin Abdul Aziz Al Dhoheyan
Kingdom of Saudi Arabia
2.37
Investment & Business Holding Group
Lebanon
2.19
Imad Ibrahim Itani
Lebanon
1.88
International Finance Corporation – IFC
–
1.70
Executives and Employees
Lebanon
0.61
Others
–
15.17
Global Depositary Receipts (« GDRs ») (4)
–
21.55
Total shareholding(5)
–
100.00
(1)Percentage ownership figures represent Common Shares owned by the named Shareholders and are expressed as a percentage of the total number of Common Shares issued and outstanding as at the date hereof.
(2)FRH Investment Holding SAL is a member of the Board of Directors, represented by Fahd Rafic Hariri.
(3)The Audi Family includes the following members of the Board as at the date hereof: Janaudi Holding S.A.L (Represented by Marc Jean Audi) and Sherine Raymond Audi.
(4)GDRs represent common shares held by « The Bank of New York Mellon » as a holder of record in its capacity as depositary under the Bank’s GDR Program.
In addition to the ownership of Common shares mentioned above, 8.35 % of the Bank’s Common Shares are held through GDRs by each of FRH Investment Holding s.a.l. (including by its controlling shareholder), Sheikh Dheyab Bin Zayed Bin Sultan Al-Nahyan, the Al-Hobayb Family, the Audi Family, the Family of Late Sheikha Suad H. Al Homaizi, and Mohammed Bin Dhoheyan Bin Abdul Aziz Al Dhoheyan. (respectively, 1.56%, 2.13%, 1.66%, 0.51%, 1.23%, and 1.27%). Information on GDR ownership is based on self-declarations (pursuant to applicable Lebanese regulations) as GDR ownership is otherwise anonymous to Bank Audi.
(5)As at the date hereof, the total number of common shares is 588,538,215. The Bank (and its affiliates) is the custodian of shares and/or GDRs representing 95.63 % of the Bank’s Common Shares.
(1)It is not the duty of the Audit Committee to plan or to conduct audits or make specific determinations that the Bank’s statements and disclosures are complete and accurate, nor is it its duty to assure compliance with laws, regulations and the Bank’s Code of Ethics and Conduct. These are the responsibilities of Management and/or of external auditors.
CORPORATE STRUCTURE
Bank Audi sal(*)
Odea Bank A.Ş.
76.42%
BAPB Holding Ltd
100.00%
Audi Capital (KSA) cjsc
99.99%
Banque Audi (Suisse) SA
100.00%
Bank Audi LLC (Qatar)
100.00%
Bank Audi France sa
100.00%
SOLIFAC sal
100.00%
Audi Investments Holding sal
100.00%
Infostructure sal
100.00%
Lebanon Invest sal
100.00%
Business Lines
Standing Management Committees
Support and Control Functions
Corporate and Commercial Banking
Compliance
Executive Committee
Asset Liability Committee
Shareholders
Corporate Secretariat
Board of Directors
Board Committees
Chief Executive Officer
Audit Committee
Risk Committee
Remuneration Committee
Executive Committee
Compliance AML / CFT
Committee
Corporate Governance & Nomination Committee
The major subsidiaries and branches abroad of Bank Audi sal as at 31/12/2024 are:
GROUP HIGH LEVEL CHART
Retail Banking
Private Banking
Financial Institutions
Digital Banking – Neo
Operations
Information Technology
Credit
Finance
Internal Audit
Human Resources
Risk Management
Legal
Research
IFRS 9 Committee
Neo Board
Audit Findings Review Committee
IT Committee
Information Security and Operational Risk Committee
Credit Committee
Anti-money Laundering Committee
Human Resources Committee
Disclosure Committee
Mother company (Banking)
Banking
Capital Markets
Marketing & Communications
Corporate Social Responsibility Committee
Holding
Factoring
IT services
(*)Percentage ownership represents the economic ownership of the Bank with direct and/or indirect ownership through subsidiaries.
BOARD OF DIRECTORS
COMPOSITION OF THE BOARD OF DIRECTORS FREQUENCY OF MEETINGS
The current members of the Board of Directors were elected by a resolution of the Ordinary General Assembly of shareholders held on 25 July 2024 for a three-year term expiring on the date of the
annual Ordinary General Assembly meeting that will examine the accounts and activity of the year 2026.
In 2024, the Board of Directors held 6 meetings, the Group Audit Committee held 5 meetings, the Group Risk Committee held 4 meetings, the Remuneration Committee held 4 meetings,
the Corporate Governance and Nomination Committee held 2 meetings, and the Compliance/AML/CFT Board Committee held 4 meetings.
The names of Directors(2)serving at the date of this report are the following:
CHANGES TO THE BOARD OF DIRECTORS DURING THE YEAR 2024
Mr. Samir N. HANNA
(Chairman)
Members
Independent (as per the Bank’s Corporate Governance
Guidelines(3))
Member of the Group Audit Committee
Member of the Board Group Risk Committee
Member of the Remuneration Committee
Member of the Compliance/ AML/CFT Board Committee
On 16 May 2024, acting on the recommendation of the then Chairman – General Manager Mr. Samir Hanna, the Board of Directors resolved to separate the roles of Chairman and General Manager, as now permitted by Lebanese laws and the Bank’s bylaws. Pursuant to the above, Mr. Samir Hanna relinquished his managerial duties and has since been serving as a Non-Executive
On 25 July 2024, the Ordinary General Assembly of Shareholders convened and resolved to reelect three of the then serving Directors (the others having expressed their wish not to be considered for a new mandate) and five new Directors, all for a term of three years expiring on the date of convening the Annual General Assembly of Shareholders that will examine the accounts of the year 2026.
Dr. Khalil M. BITAR • Chair • •
Ms. Sherine R. AUDI • Chair •
Mr. Mutlaq H. AL-MORISHED • • •
Janaudi Holding sal, represented by Mr. Marc J. AUDI
•
Chair •
Chair •
•
FRH Investment Holding sal, represented by
Mr. Fahd R. HARIRI • •
U Chain – Directors Ltd., represented by Mr. Maher G. MEREHBI
•
•
•
•
Mr. Khalil I. EL DEBS
(General Manager – CEO)
Secretary of the Board
Chair of the Board. Concomitantly, Mr. Khalil El Debs was appointed General Manager – CEO.
Cortbaoui & Kanaan
LEGAL ADVISORS
Ernst & Young p.c.c.
BDO, Semaan, Gholam & Co.
AUDITORS
The newly elected Board convened following the General Assembly of shareholders and resolved, amongst other things, to (i) re-elect Mr. Samir N. Hanna as Chairman of the Board; and (ii) reappoint Mr. Khalil El Debs as General Manager – CEO.
Dr. Farid F. LAHOUD
(Chief Compliance Officer – Corporate Secretary)
(2)Listed according to their dates of appointment.
(3)Definition of « Director independence » as per the Bank’ s Governance Guidelines (summary):
« In order to be considered independent Director by the Board, a Director should have no relationship with the Bank that would interfere with the exercise of independent judgment in carrying out responsibilities as a Director. Such a relationship should be assumed to exist when a Director (him/herself or in conjunction with affiliates):
is occupying, or has recently occupied an executive function in the Bank or the Group;
is providing, or has recently provided advisory services to the Executive Management;
is a major shareholder (i.e. owns, directly or indirectly, more than 5% of outstanding Audi common stock), or is a relative of a major shareholder;
has, or has recently had a business relationship with any of the Senior Executives or with a major shareholder;
is the beneficiary of credit facilities granted by the Bank;
is a significant client or supplier of the Bank;
has been, over the 3 years preceding his appointment, a partner or an employee of the Bank’s external auditor;
is a partner with the Bank in any material joint venture.
In addition to the above, the Board of Directors is satisfied with the ability of the independent Directors to exercise sound judgment after fair consideration of all relevant information and views without undue influence from Management or inappropriate outside interests. »
FEES PAID TO STATUTORY AUDITORS
Total fees paid to Ernst & Young and BDO, Semaan, Gholam & Co statutory auditors for the services rendered to the Group for the years 2024 and 2023 are shown as below:
Audit and service fees paid to the Group auditors and their member firms (Lebanon and abroad)
USD ‘000 Dec-24 Dec-23
Audit services fees related to Group statutory auditors (Lebanon and abroad)
Audit services fees related to other audit firms
1,930
395
1,739
247
Total Audit Services Fees
Other services fees to Group statutory auditors (Lebanon and abroad)
Total Audit Services and other Fees
2,325
1,986
207
265
2,532
2,251
Other services cover tasks required by law and other services compatible with the statutory auditors’ role.
BIOGRAPHIES OF BOARD MEMBERS
SAMIR N. HANNA
Chairman
Age: 80 – Lebanon Director since August 1990
Term expires at the 2027 annual General Assembly of shareholders
Chairman of the Board of Directors
Former Chief Executive Officer
Samir Hanna is the current Chairman of the Board of Directors and former Chief Executive Officer of the Bank Audi Group. He joined Bank Audi in January 1963 and held several managerial and executive positions across various departments of the Bank. He was appointed General Manager of the Bank in 1986 and a member of its Board of Directors in 1990. In the early 1990s, he initiated and managed the expansion strategy of Bank Audi, transforming it into a leading banking group offering universal banking products and services, including Corporate, Commercial, Retail, Investment, and Private Banking.
He was elected Chairman of the Board of Bank Audi sal, succeeding Mr. Raymond Audi, on 10 April 2017. Samir Hanna has served as a member or Chair of the Boards of a number of subsidiaries of the Bank Audi Group, including (i) member of the Board of Directors of Odea Bank A.Ş., Bank Audi’s subsidiary in Turkey, from 2012 until 2021 (Chairman until November 2020), (ii) member of the Board of Directors of Banque Audi (Suisse) SA from 2011 until 2021, and (iii) member of the Board of Directors of Bank Audi sae (Egypt) from 2006 until 2020.
In May 2024, acting on his recommendation, the Board of Directors resolved to separate the roles of Chairman and General Manager – CEO, as now permitted by Lebanese laws and the Bank’s bylaws. Pursuant to the above, Mr. Samir Hanna relinquished his managerial duties and has since been serving as a Non-Executive Chair of the Board.
SHERINE R. AUDI
Board Member
Age: 64 – Lebanon Director since April 2017
Term expires at the 2027 annual General Assembly of shareholders
Non-executive Chair of the Board of Directors of Bank Audi France
Chair of the Board Compliance & AML/CFT Committee
Sherine Audi is the non-executive Chair of the Board of Directors of Bank Audi France SA, the
French subsidiary of the Bank.
She started her banking career in 1980 at Bank Audi France SA, a fully owned subsidiary of Bank Audi sal. She held several positions there, including in credit, business development, operations, and administration. She was appointed Assistant General Manager of Bank Audi France in 1995, then Executive Director in 2000, and Director-General Manager from 2010 until 2022. In this capacity, she led Bank Audi France’s activity and drove its strategic transformations (including technological and regulatory ones) as required by current market rules and practices. She also acted as the representative of Bank Audi France SA toward the French banking authorities and professional organizations. In September 2022, she resolved to relinquish her executive duties and was elected non-executive Chair of the Board of Directors of Bank Audi France, effective January 1, 2023.
Since December 2021, she has also served as Vice-Chair of the Chambre de Commerce Franco-Libanaise, after having served as its treasurer since 2015.
Sherine Audi holds a diploma as a Certified Director from Sciences Po Paris, jointly with the French Institute of Directors.
KHALIL M. BITAR
Board Member
Age: 82 – Lebanon Director since April 2010
Term expires at the 2027 annual General Assembly of shareholders
Independent member of the Board of Directors
Chairman of the Risk Committee
Member of the Remuneration Committee
Khalil Bitar is an independent member of the Board of Directors and the Chair of its Risk Committee since 2010. He is a former Professor of Physics and a former Dean of the Faculty of Arts and Sciences of the American University of Beirut (AUB). He held this last position from 1997 until 2009, playing an instrumental role in advocating AUB’s strengths and regional position as the premier center for higher education, and in re-establishing its PhD programs.
Throughout his career, he held several academic and administrative positions, including Associate Director of the Supercomputer Computations Research Institute – Florida State University (between 1994 and 1997) and visiting professor at leading academic institutes in Europe and North America (including the European Organisation for Nuclear Research in Geneva, the International Centre for Theoretical Physics in Italy, The Institute for Advanced Study in New Jersey, the Fermi National Accelerator Laboratory (Fermilab) in Illinois, the University of Illinois, Brookhaven National Lab. in New York, the Max Planck Institute in Munich, and the Rockefeller University in New York). He also served two mandates as member of The Institute for Advanced Study in Princeton, New Jersey, between 1968 and 1972.
Khalil Bitar has also served as (i) member of the Board of Directors of Audi Private Bank sal and the Chairman of its Risk Committee, and (ii) member of the Board of Directors of Audi Investment Bank sal and Chairman of its Risk Committee from March 2012 until November 2013, and as advisor to its Board for Risk Committee matters until the merger of both entities with Bank Audi sal in December 2020.
He holds a Bachelor of Science degree in Physics from the American University of Beirut, a Master’s of Science degree in Physics, and a PhD in Theoretical Physics from Yale University in the United States.
MUTLAQ H. AL-MORISHED
Board Member
Age: 67 – Kingdom of Saudi Arabia
Director since July 2024
Term expires at the 2027 annual General Assembly of shareholders
Member of the Board Compliance & AML/CFT Committee
Member of the Audit Committee
Mutlaq Hamad Al-Morished is served most recently (until March 2024) as the Chief Executive Officer and a Board Member at TASNEE, a major industrial corporation based in Saudi Arabia. His career began in the USA with Shell, followed by holding key roles at SADAF, where he advanced from Chief Engineer to Vice President of Engineering & Operations, and later President in 1998. He also led the Saudi Iron & Steel Co. (HADEED) as President from 1999 to 2000.
In 2000, Mr. Al-Morished joined Saudi Basic Industries Corporation (SABIC), a leading diversified chemical manufacturing company based in Saudi Arabia, holding various senior positions including President of the Metals Group, Vice President of Shared Services, CFO, and EVP of Finance, until his move to TASNEE in 2015.
His other board memberships include the Saudi General Authority for Military Industries, TRONOX (NYC), and the Chairmanship of the National Metal Manufacturing & Casting Co. (Maadaniyah). Since 2017, he also serves as the independent Chairman of Citigroup Saudi Arabia JSC, a company licensed to undertake securities business activities and financial advisory services in the KSA.
Previously, he served as Chairman of YANSAB, SABIC Capital in Holland, SAUDI KAYAN, SABIC Captive Insurance Limited in the UK, and Alinma Investment Co. He has also held board roles with Alinma Bank, Gulf Bank, GARMCO in Bahrain, Aluminum Bahrain (ALBA), Alinma Tokio Marine, and the General Organization of Saudi Arabian Airlines, among others. Additionally, he was a member of the Advisory Board for Economic Affairs of the Supreme Economic Council of Saudi Arabia.
Mr. Al-Morished holds an MBA from Stanford University (1989), an MS in Nuclear Engineering from Princeton University (1981), and a BS in Nuclear Physics & Math from the University of Denver (1979).
FRH INVESTMENT HOLDING SAL
Represented by
FAHD R. HARIRI
Board Member
Lebanon
Director since July 2024
Term expires at the 2027 annual General Assembly of shareholders
Member of the Risk Committee
Member of the Remuneration Committee
FRH Investment Holding sal is a holding company fully owned (99.9%), and represented on the Board, by Mr. Fahd R. Hariri. It holds Common Shares of the Bank representing 12.25% of the total number of Common Shares issued and outstanding as at June 30, 2024. In addition to the foregoing, Mr. Fahd Hariri owns GDRs representing 1.56% of the Bank’s Common Shares.
Fahd Hariri
Age: 44 – Lebanon
Fahd Hariri is an accomplished businessman involved in the development of residential properties and chairing a number of international investment firms. His investment portfolio extends internationally with real estate holdings in prominent cities such as New York, Paris, and Monte Carlo, as well as in leading corporations and Lebanese banks.
He is the son of late Rafiq Hariri, former prime minister of Lebanon assassinated in 2005. Despite his family ties, he has never been politically active nor has he held any public mandate.
Fahd Hariri pursued an education in architecture at the École Spéciale d’Architecture in Paris, graduating in 2004. With a passion for art and design, he is the owner and president of the Alberto Pinto studio (now known as Pinto) since 2020.
KHALIL I. EL DEBS
Board Member
General Manager -Chief Executive Officer
Age: 53 – Lebanon
Director since July 2024
Term expires at the 2027 annual General Assembly of shareholders
Chairman of the Executive Committee
Khalil El Debs is the Chief Executive Officer of Bank Audi sal, a position he assumed in May 2024 following a nearly 30-year tenure at the bank. A seasoned financial executive with deep expertise in corporate and investment banking, risk management, and strategic restructuring, he has played a critical role in shaping the bank’s growth and operational realignment over the years.
Since joining Bank Audi in 1995, Mr. El Debs has been instrumental in strengthening the bank’s corporate and commercial banking divisions, driving key financing initiatives, and overseeing major client relationships. His leadership has been central to navigating complex financial environments and optimizing the bank’s core business operations across multiple regional markets.
Prior to his appointment as CEO, he served as Deputy Chief Executive Officer, managing a broad portfolio that spanned Corporate & Commercial Banking, SME Banking, Retail Banking, Energy & Infrastructure Finance, Operations, Private Banking, Private Equity, and the International Division. In this role, he led strategic initiatives aimed at reinforcing the Bank’s financial position and operational efficiency.
From 2008 to 2020, as Group Head of Corporate Banking, Mr. El Debs oversaw the bank’s lending strategy across international markets, serving on key credit committees and leading the establishment of Bank Audi’s syndication and project finance division. He played a pivotal role in structuring and executing large-scale transactions, fostering partnerships with international and regional financial institutions.
Beyond his executive responsibilities, Mr. El Debs serves as Chairman of the Board of Directors of Bank Audi LLC in Qatar. He is also a member of the Boards of Directors of Banque Audi (Suisse) S.A., Bank Audi France S.A., and Audi Capital KSA. Furthermore, he serves on the boards of several other subsidiaries of the Bank Audi Group.
Before joining Bank Audi, Mr. El Debs began his career at ABN AMRO Bank N.V., where he gained experience in corporate finance and international banking.
He holds a Master of Business Administration from the Lebanese American University and has been a Chartered Financial Analyst (CFA) since 2001.
Lebanon
Director since July 2024
Term expires at the 2027 annual General Assembly of shareholders
Chairman of the Audit Committee
Chairman of the Remuneration Committee
Member of the Board Compliance & AML/CFT Committee
Janaudi Holding sal is a family holding company owned by the members of the family of late Jean Wadih Audi, one of the founders of the Bank. It holds Common Shares of the Bank representing 1.80% of the total number of Common Shares issued and outstanding as at June 30, 2024, in addition to GDRs representing 0.2% of the Bank’s Common Shares. Janaudi Holding sal is chaired by Marc J. Audi and is represented by him on the Board of Directors of the Bank.
JANAUDI HOLDING SAL
Represented by
Marc Audi
Age: 66 – Lebanon
MARC J. AUDI
Board Member
Marc Audi has been a member of the Board of Directors of the Bank since March 1996. He served
as General Manager from 2004 until February 2022 and as Lebanon Country Manager of the Bank Audi Group until June 2020.
He started his banking career in 1981 and held several executive positions within the Bank Audi Group in various countries, including France, the USA (California), Switzerland, and Lebanon. Throughout his career, he held executive responsibilities at the group level in Commercial Lending, Capital Markets, and Private Banking (notably serving as General Manager of Banque Audi (Suisse) SA, the Private Banking arm of the Group, until 2005).
Marc Audi currently serves as Chairman of the Board of Directors of Banque Audi (Suisse) SA and as a Board member of several other affiliates of the Bank Audi Group.
He holds a Master of Business Administration from the University of Paris IX – Dauphine.
Cyprus
Director since July 2024
Term expires at the 2027 annual General Assembly of shareholders
Member of the Audit Committee
Member of the Risk Committee
Member of the Remuneration Committee
U Chain Directors Ltd. (« UCD ») is a newly incorporated company established under the laws of the Republic of Cyprus. Its purpose is to provide directorship services to the banking and other business sectors. UCD has nominated Maher Merehbi as its representative on the Board of the Bank.
U CHAIN
DIRECTORS LTD.
Maher Merehbi
Age: 60 – Lebanon
Represented by
MAHER G. MEREHBI
Board Member
Maher Merehbi has been the CEO, for more than 12 years, of a reputable group of companies
engaged in the construction and development fields, with activities in Lebanon, the Gulf countries and Africa.
The aim of the presence of UCD, represented by Mr. Merehbi, on the Board of the Bank is to reinforce the Board with experienced independent members having the necessary qualifications to bring value to the Board of the Bank.
REMUNERATION POLICY AND PRACTICES
The objective of the Remuneration Policy of the Bank is to establish coherent and transparent Compensation and Benefits practices in the Bank and the Group, that are consistent with the Bank’s culture, business, long-term objectives, risk strategy, performance, and control environment, as well as with legal and regulatory requirements.
It is Bank Audi’s policy to provide all employees of the Group with a comprehensive and competitive compensation package that is commensurate with each employee’s position, grade and performance. Such performance is assessed on the following 3 performance criteria: key job responsibilities, SMART business goals, and behavioral competencies. Individual compensations are also linked to the achievement of objectives and are aligned with prudent risk taking. The compensation and benefits of control functions are determined in a way that preserves their objectivity and independence.
The aggregate consolidated amount of compensation and benefits paid by the Bank is included in the annual budget approved by the Board and is set in a way not to affect the Group’s medium and long-term capacity to sustain such levels of compensation nor its financial position or its interests.
Core Compensation and Benefits include basic salary and performance-based bonus (in addition to a number of ancillary benefits including individual and family medical coverage, education allowances, and others).
There is currently no outstanding stock-related compensation. And there are no compensation arrangements encompassing claw backs or deferrals of payments, save for matters resulting from applicable laws and regulations. Amounts of compensation paid annually are disclosed in accordance with the International Financial Reporting Standards and with the provisions of Article 158 of the Lebanese Code of Commerce.
As reported in the Bank’s financial statements, salaries, bonuses, attendance fees and other short-term benefits awarded to key Management personnel (as defined in Note 50 accompanying the financial statements) during the year 2024, amounted to LBP 451,341 million, in addition to postemployment benefits – Income statements aggregating LBP 519 million and to postemployment benefits – Other comprehensive income aggregating LBP (6,719) million. Provision for end-of-service benefits of key Management personnel amounted to LBP 27,532 million as of 31 December 2023 (2022: LBP 4,035 million).
Following the changes at Board level including the separation of the Board chairmanship from management and the appointment of a new CEO, the definition of Key Management Personnel has been reviewed. Key Management Personnel for the purpose of 2024 include the Chair and members of the Board of Directors, the General Manager – CEO, the Assistant General Manager – Deputy CEO, the Assistant General Managers (two individuals) and the CFO. The numbers in 2023 quoted above are aligned to the aforementioned definition for comparison purposes.
02
Management
Discussion & Analysis
OVERVIEW OF BANK AUDI SAL
Bank Audi sal (« Bank Audi ») is a leading Lebanese banking group with a universal banking profile. Founded in 1830 in Sidon, Southern Lebanon, the Bank was incorporated in its present form in 1962 as a private joint stock company with limited liability (« société anonyme libanaise »). Bank Audi is registered in the Beirut Commercial Registry under number 11347 and in the Lebanese list of banks under number 56. The Bank is licensed by the Central Bank of Lebanon. The Central Bank of Lebanon is the lead supervisor of Bank Audi and its subsidiaries. Bank Audi’s head office and registered address is Bank Audi Plaza, Omar Daouk Street, Bab Idriss, P.O. Box: 11-2560, Beirut, Lebanon.
Bank Audi offers universal banking products and services covering Corporate, Commercial, Individual and Private Banking services to a diversified client base, mainly in the MENA region. In addition to its historic presence in Lebanon, Switzerland and France, the Bank has operations in Saudi Arabia, Qatar and Abu Dhabi (through a representative office). In 2023, the Bank resolved to sell its operation in Turkey in light of the significant capital needs it requires to maintain the momentum of its activity at its current trend. On 28 March 2025, the sale transaction was completed.
The initial shareholders of the Bank were members of the Audi family, together with Kuwaiti investors. Today, the shareholder base comprises more than 1,500 holders of common shares and global depositary receipts (representing common shares), including individual investors, institutional investors and two supranational agencies: the International Finance Corporation (« IFC »), a member of the World Bank Group, and the European Bank for Reconstruction and Development. The Bank’s common shares (ordinary shares and global depositary receipts) are listed on the Beirut Stock Exchange (the « BSE ») (Ticker: Audi. BY and AUSR respectively).
Terms such as « Bank Audi », « the Bank », « the Group », « we », « us » and « our » refer to Bank Audi sal and its consolidated subsidiaries. Terms such as: i) Lebanese entities consist of Bank Audi sal and other minor Lebanese entities including consolidation adjustments;
ii) Turkey represents Odea Bank A.Ş. before its sale; iii) Private Banking entities consist of Banque Audi (Suisse), Audi Capital (KSA), and Bank Audi Private Bank Holding (Cyprus); and iv) Other entities consist of Bank Audi France sa, Bank Audi LLC (Qatar) and other European and MENA entities.
The dicussion and analysis that follows covers the consolidated performance of Bank Audi in the year 2024, based on the audited consolidated financial statements of the Bank for the fiscal years ended 31 December 2024 and 31 December 2023. The Bank’s consolidated financial statements are prepared in accordance with the International Accounting Standard 34, the general accounting plan for banks in Lebanon, and the regulations of the Central Bank of Lebanon, the Banking Control Commission of Lebanon (BCC) and the Lebanese Capital Market Authority (CMA). Such Financial Statements include the results of the Bank and its consolidated subsidiaries as listed in Note 45 to the 2024 Financial Statements. Ernst & Young p.c.c. and BDO, Semaan, Gholam & Co. have jointly audited the annual financial statements.
The Group primarily operates in Lebanon, which has faced a severe fiscal, monetary, and economic crisis since October 17, 2019, leading to an unprecedented recession. This situation has significantly hindered the ability of the Lebanese government and banking sector to borrow internationally. Banks have imposed unofficial capital controls, limiting foreign currency transfers and reducing credit and cash withdrawals, further disrupting economic activity.
Early on the Crisis, the difficulty in accessing foreign currency has created a parallel market, where rates diverged sharply from the then applicable official rate of LBP 1,507.5/USD, leading to rampant inflation and a currency crisis. In February 2023, the Central Bank of Lebanon changed the official published exchange rate from LBP 1,507.5 to LBP 15,000 to the US Dollar. Sayrafa Rates and parallel market rates remained highly volatile and divergent from the new official published exchange rate (LBP 42,000 and LBP 58,200 respectively at 1 February 2023).
In February 2024, the Central Bank of Lebanon changed again the official published exchange rate from LBP 15,000 to LBP 89,500 to the US Dollar, aligning hence the rate for financial reporting with the prevailing market rate and reducing discrepancies in financial figures.
The Bank continues to maintain its accounts in Lebanese Pounds (LBP) following regulatory requirement and IAS 21 standard. All figures presented in the following MD&A are expressed in US Dollars (« USD »), unless specifically otherwise stated. As per regulatory requirement, some balances are translated based on other exchange rate such as but not limited to the « Sayrafa » rate. Since 2020, the Central Bank has implemented various measures to control inflation, including lifting import subsidies and allowing limited cash withdrawals, but the ongoing crisis hampers effective recovery. The crisis has led to a distinction between onshore and offshore assets, with terms like « local Dollars » and « fresh accounts » emerging to describe the differences in access to funds. Political deadlocks have hindered recovery, exacerbating the economic situation, which is characterized by a lack of government reform, an IMF program, and necessary laws. While some reforms have been initiated, uncertainties remain, making it difficult for management to estimate the crisis’s full impact on the Bank’s financial position.
In particular, the uncertainty on the exchange rate, and the lack of visibility on the government’s plans with respect to: (a) the high exposures of banks with the Central Bank of Lebanon, (b) the Lebanese sovereign securities, and (c) the currency exchange mechanisms and currency exchange rates that will be applied, in rendering Management unable to estimate in a reasonable manner the impact of these matters on its consolidated financial position. Management anticipates that the above matters will have a materially adverse impact on the Group’s consolidated financial position and its consolidated equity.
Until the above uncertainties are resolved, the Group is continuing its operations as performed since 17 October 2019 and in accordance with the laws and regulations. De-facto capital controls and inability to transfer foreign currencies to correspondent banks outside
Lebanon are exposing the Group to litigations that are dealt with on a case by case basis when they occur. The Group has been subject to increased litigations as a result of these restrictive measures adopted by Lebanese banks in relation to withdrawal of funds and transfers abroad, as well as in relation to the repayment by customers of local foreign currency loans in Lebanese Pounds. Management is carefully considering the impact of these litigations and claims. There are still uncertainties related to the consequences of these restrictive measures based on the current available information and the prevailing laws and local banking practices. Management believes that a legislative solution is urgently needed, through the enactment of laws that are appropriate for the adjudication of the unconventional legal disputes arising under the current exceptional circumstances. Due to recent developments and the increasing trend in judgments ruled in favor of the plaintiffs and customers during years 2021, 2022 and 2023, Management considers that they may affect negatively the liquidity of the Group (refer to Note 56). The amount cannot be determined presently.
Given the current uncertainties, it is challenging to create accurate future plans. However, the Group is focused on strengthening its financial position and capitalization to better withstand future pressures, aiming to position Bank Audi as a leader in the sector when restructuring and recovery occur.
STRATEGY
The Bank’s consolidated activity and results continue to be in line with those observed over the past 6 years, heavily marked by the persisting challenges in the operating conditions in the country of presence, particularly in Lebanon and Turkey, the Group’s two principal markets.
Within this backdrop, the Bank continues to implement a direction aiming at allowing it to cruise along the transitory period leading to the restructuring of the banking sector. This direction revolves around resilience and readiness while encompassing:
Implementing the six going concern pillars.
Developing scalable business opportunities in both Corporate/ Commercial banking and Individual / Personal banking segments.
Implementing a digital banking solution in Lebanon, « neo bank », to support the quality of earnings.
Adapting quickly and agilely to the numerous regulatory changes affecting the banking sector.
Divesting from operations and activity with heightened capital
needs requirements,
Certain statements in the MD&A are « forward-looking statements, » reflecting the Bank’s expectations regarding its operations, financial condition, competitive position, business plans, growth initiatives, and potential regulatory impacts. These statements often include terms like « believes, » « expects, » « anticipates, » and similar expressions. They do not guarantee future performance and are subject to risks and uncertainties that could lead to actual results differing significantly from these projections. The Bank does not commit to updating any forward-looking statements.
Lebanon’s economic and banking data are derived from the International Monetary Fund, the Central Bank of Lebanon, various Lebanese governmental entities and the Bank’s internal sources. The region’s economic and banking data are derived from the International Monetary Fund, the Economist Intelligence Unit, Bloomberg, the region’s central banks and the Bank’s internal sources.
This discussion and analysis starts with an overview of the Bank’s strategy, followed by a review of the operating environment and a comparative analysis of the Group’s financial conditions and results of operations for the periods ended 31 December 2024 and 31 December 2023. An overview of share information and dividend policy comes next, followed by risk management, resources deployed, compliance and corporate social responsibility.
Developing entities operating outside Lebanon, among which Private Banking entities, sustaining the earning generation momentum while deploying a risk management and control/ compliance framework;
Targeting a lean organizational structure group-wide, by improving operational efficiency and optimizing cost structure
Sustaining compliance with rules and regulations, while maintaining clear communication, transparency and disclosures.
In executing this direction, Management will be prioritizing the Group’s ability to withstand pressures, while positioning the Lebanese entities at the forefront of the sector in a post-restructuring era to ensure a swift recovery and prompt resumption of normal banking activities. Focus will primarily be on adapting to changing regulations, improving earnings quality, preserving offshore liquidity, and managing increased non-financial risks in the absence of a Capital Control law. In parallel, the Group will be also enhancing synergies across entities, enforcing prudent risk and disciplined cost management policies, and upholding the implementation of compliance best practices.
OPERATING ENVIRONMENT
The fourth quarter of 2024, which saw the realization of a ceasefire in the country and the fall of the regime in Syria, opened the country to new horizons to Lebanon that could be quite promising, if the opportunity is grasped on behalf of Lebanese decisions makers, especially that it was followed in early 2025 by promising presidential elections, PM appointment and cabinet formation. The 13-month war had significant damages on Lebanon’s economy through direct and indirect effects. Those costs are estimated at no less than half the country’s GDP, leading to economic stagnation and pressures on almost all sectors of the real economy.
Real sector indicators for the year 2024 were mostly on the downside. Among these, we mention activity at the airport with a contraction of 20.8% year-on-year in 2024, total value of cleared checks which decreased by 81.5% year-on-year in 2024, number of tourists with a decrease of 32.1% year-on-year in 2024, property taxes with a decrease of 48.7% year-on-year in 11M 2024 and
FX loans declined by USD 2.0 billion in 2024 (to reach USD 5.5 billion), enlarging the cumulative decline since crisis onset to USD
32.6 billion. This year’s decline was mostly in resident FX loans (-USD 1.9 billion), while non-resident FX loans were on a standstill. Since the crisis onset in October 2019, resident FX loans contracted by USD 28.6 billion, while non-resident FX loans dropped by USD
billion over the period.
The year 2024 saw a considerable rise in LBP interest rates, while foreign currency rates remained closed to nil. The average rate on LBP deposits rose from 0.55% in December 2023 to 3.58% in December 2024, yet remained much lower than the 9.03% rate reported in October 2019. The average rate on FX deposits stabilized at 0.03% in December 2024 (similar to the December 2023 level), i.e much lower than the 6.61% rate reported in October 2019.
The medium scenario also assumes the ceasefire persists throughout 2025, yet with no end to the political deadlock, and no launch of reforms. Under this scenario, real GDP growth would be close to 2%, BdL reserves would stabilize after fallout and the balance of payments would be in quasi-balance.
The negative scenario assumes the war re-emerges in 2025 amid an all-out war scenario, with no end to the political deadlock and no launch of reforms. Under this scenario, real GDP growth would be significantly negative and could reach around -15%, inflation would surge up to 200% at least, BdL reserves would be cut into half and the balance of payments would record a large deficit of no less than USD 5 billion.
Lebanon’s Major Economic Figures
After circa 18 months of monetary stability observed so far driven by the new monetary paradigm of the Central Bank refraining from financing the State, the Lebanese Pound’s exchange rate outlook obviously depends on the scenarios envisaged looking ahead. The Pound is set to definitely maintain stability under the positive scenario, most likely in the middle scenario but undeniably not in the negative scenario.
Within this perspective, the need to restore a confidence imposes on political authorities the imperative challenge of safeguarding the cease fire, promptly filling the institutional constitutional gap, restoring the firm cohesive role of the State and the army, agreeing on answers and solutions to all pending issues and sending the right signals to the business and investment community at large.
property sales value which dropped by 59.3% year-on-year in 11M 2024. Quantity of goods at the Port of Beirut also noted a slight decrease of 0.2% year-on-year in 2024. On the other hand, at the level of real sector indicators which posted positive performances in 2024, construction permits increased by 4.5% during the period.
At the monetary level, the Lebanese Pound maintained its stability during the year despite the war environment amid orthodox policies followed by the Central Bank of Lebanon and a containment of LBP currency in circulation outside BdL. In parallel, inflation has been significantly contained, reporting 12% at end-year 2024, down from 204% in the year 2023 and an average of 173% over the 2020-2023 crisis years.
At the capital markets level, the year 2024 was positive for both equity and bond markets. The stock market price index contracted by 24.7% over the year, within the context of relatively weaker market liquidity, with trading value contracting by 9.6% relative to the same period of last year. Lebanon’s sovereign eurobond prices are now quoted at 18 cents/USD across the curve, against 6 cents/USD at end-2023, with institutional investors foreseeing an opportunity of a domestic political breakthrough with potential economic recovery beyond the near term.
At the banking sector level, the year 2024 has seen a continuation of the banking sector trends reported since the economic crisis onset in October 2019, though at a more moderate pace, namely a contraction in FX loans and FX deposits, low rate of interest in foreign currency coupled with a surge in LBP rates, contraction in shareholders’ equity amid continuing bank losses and stable FX liquidity following sharp declines post-crisis.
FX deposits declined by USD 3.4 billion in 2024 (to reach USD 87.9 billion), enlarging the cumulative decline since crisis onset to USD 35.7 billion. This year’s decline was mostly in resident FX deposits (-USD 3.3 billion), while non-resident FX deposits were on a standstill. Since the crisis onset in October 2019, resident FX deposits contracted by USD 24.7 billion, while non-resident FX deposits dropped by USD 11.0 billion over the period.
Banks FX liquidity abroad managed to report a slight rise in the year 2024. It rose from USD 4.5 billion in December 2023 to USD
4.7 billion in December 2024, against a high of USD 8.4 billion in October 2019. To this foreign liquidity, a USD 0.6 billion of cash in vault in US$ could be added, raising the total FX primary liquidity to USD 5.3 billion in December 2024 (against USD 5.2 billion in December 2023).
Shareholders’ equity amounted to USD 4.8 billion in December 2024, down from USD 5.1 billion in December 2023 amid the effect of official exchange rate devaluation on shareholders equity. It is worth recalling that shareholders’ equity were as high as USD 20.6 billion as at October 2019, i.e on the eve of the crisis eruption. The cumulative contraction in equity since then is tied to bank losses over the period resulting from FX costs, operating expenses related to inflationary pressures and excessive provisioning requirements on the sovereign.
At the dawn of a new year characterized by an emergence from war atrocities, a careful analysis imposes itself as to the various scenarios envisaged for 2025 amid hopes that the year would represent a significant inflection point towards what the Lebanese, disregarding their belongings, affiliations and beliefs, aspire to looking ahead.
Three scenarios are actually envisaged for 2025, namely the positive scenario, the middle scenario and the negative scenario, with probabilities of realization of 60%, 30% and 10% respectively. Having said that, the 2025 outlook emerges with possible upside and downside risks that might represent a net deviation of the outlook ahead from the preset scenarios.
The positive scenario assumes the ceasefire persists throughout 2025, with the launch of a widespread reconstruction effort, an end to the political deadlock, the launch of long awaited reforms and a full fledge agreement with the IMF. In case the conditions of such a scenario materialize, real GDP growth would jump to above 8%, inflation would go down to global levels, BdL reserves would be significantly reinforced and the balance of payments would turn into a surplus of no less than USD 4 billion.
(USD Million) 2023 2024 Var 2024/2023
Real Sector Indicators
Real GDP growth
-0.2%
-5.7%
-5.5%
Number of passengers at the Airport (000s)
7,094
5,620
-20.8%
Number of tourists (000s)
1,666
1,131
-32.1%
Merchandise at the Port (000 tons)
5,421
5,412
-0.2%
Consturction permits (000 square meters)*
3,993
4,296
7.6%
External sector
Balance of payments
+2,237
+6,437
+4,200
o.w. BdL
-813
+5,714
+6,527
o.w. Banks and Financial Institutions
+3,050
+723
-2,327
Monetary sector
M3 (end-period)
77,747
69,257
-10.9%
Cleared checks
11,759
2,176
-81.5%
Annual CPI inflation (end-period, %)
204.3%
11.7%
-192.6%
Banking sector (end-period)
Total assets
115,249
102,760
-10.8%
Total shareholders’ equity
5,092
4,820
-5.3%
Total deposits
94,750
88,646
-6.4%
Total credits
8,321
5,646
-32.1%
* 11 M figures for 2023 and 2024
4.0. CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS OVERVIEW IN 2024
PERFORMANCE BY GEOGRAPHY OPERATIONS IN LEBANON
In 2024, the Bank’s consolidated activities and results continue to be principally impacted by ongoing challenges in its two primary markets: Lebanon and Turkiye. It is also driven by the performance of its operations in France, in addition to a number of entities grouped under the Private Banking business line, along with other entities in the MENA region.
The table below sets out the contribution of each of those constituents as at end-December 2024 as compared to end-December 2023:
In Lebanon, in 2024, there was almost no progress made by the Lebanese authorities in addressing the fundamental drivers of a viable restructuring and resolution plan. Adding to its woes, Lebanon faced a severe setback following the 13-month conflict with Israel culminated in a full-fledged war in the fourth quarter and resulting in significant human, physical, and economic losses (estimated in the tune of tens of USD billion), along with a massive exodus not seen since the end of the civil war in 1990. Most sectors of the economy
of a cabinet of qualified experts, with a number of promising figures in the announced lineup. Furthermore, the IMF has stated its readiness to re-enter negotiations with the Lebanese Republic following the recent politico-economic changes in Lebanon.
In this context, activity of the Lebanese operations remained sluggish in 2024. Total assets, expressed in USD at the prevailing official FX rates, decreased by USD 1.4 billion, largely due to the
(USD Million) Volume
Lebanese Entities
14,113
76.0%
12,654
75.9%
-1,459
-10.3%
Turkey
2,836
15.3%
2,242
13.5%
-594
-20.9%
Private Banking Entities
1,235
6.7%
1,380
8.3%
145
11.7%
Bank Audi France
1,266
6.8%
1,308
7.8%
42
3.3%
Other Entities
143
0.8%
146
0.9%
3
2.1%
Consolidation Adjustments
-1,027
-5.6%
-1,065
-6.4%
-39
3.8%
Total
18,566
100.0%
16,665
100.0%
-1,901
-10.2%
ASSETS
Lebanese Entities
10,912
85.2%
10,434
84.0%
-478
-4.4%
Private Banking Entities
771
6.0%
837
6.7%
66
8.6%
Bank Audi France
1,098
8.6%
1,132
9.1%
34
3.1%
Other Entities
75
0.6%
53
0.5%
-22
-29.3%
Consolidation Adjustments
-50
-0.4%
-40
-0.3%
10
-20%
Total
12,806
100.0%
12,416
100.0%
-390
-3.0%
DEPOSITS
Lebanese Entities
228
21.7%
110
11.4%
-118
-51.8%
Private Banking Entities
369
35.2%
425
44.1%
56
15.2%
Bank Audi France
359
34.2%
343
35.6%
-16
-4.5%
Other Entities
93
8.9%
96
10%
3
3.2%
Consolidation Adjustments
0
0.0%
-11
-1.1%
-11
Total
1,049
100.0%
963
100.0%
-86
-8.2%
LOANS
Share in
Total Volume
Share in
Total
in in
Volume %
have come to a standstill, with tourism and agriculture being the hardest hit, while industrial, real estate, trade, and service sectors also suffered greatly. The banking sector showed negative effects, though to a lesser extent than other areas.
While there has been some progress earlier in the year in lowering inflation and stabilizing the exchange rate, supported by the Central Bank of Lebanon decision to end monetary financing and foreign exchange subsidies, as well as the elimination of the fiscal deficit, these reforms are insufficient for recovery. Most notably, the absence of a credible and financially viable strategy for the banking system continues to hamper economic growth and deposit recovery, while giving rise to an increasingly cash-based and informal economy and larger risks of illicit activities.
Notwithstanding, the recent political developments (Ceasefire agreement, fall of Syrian regime, presidential elections, PM designation, Cabinet announcement, etc) opened the country to new horizons starting 2025 that could be promising, of course if the opportunity is appropriately grasped on behalf of Lebanese decisions makers. The month of February 2025 saw the formation
83% devaluation of the official exchange rate, from LBP 15,000 per USD at the end of December 2023 to LBP 89,500 per USD in 2024. This evolution is driven by a decline in assets denominated in LBP and in restricted dollars (« lollars ») by respectively USD 1.3 billion and USD 279 million, within an increase in fresh dollars denominated assets by USD 181 million. Concurrently, Bank Audi (Lebanon) saw an increase in deposits denominated in fresh dollars, which rose by USD 160 million. This growth was fueled by USD
36.2 million from Lollar deposits (due to circulars 158 and 166) and USD 39 million from the Neo with the remainder justified by the growth in external accounts business.
Despite a board decision in November 2023 to extend credit facilities to Lebanese entities to counter heightened competition in the corporate sector and support retail loans for employees of reputable corporate clients, lending activity remained limited, with net loans increasing in fresh dollar terms by only USD 20 million during 2024. On the profitability front, the Bank continued to implement its past practice of allocating all pre-tax profits to provisions for risks and charges, which will be directed to various asset classes as needed until a comprehensive recovery plan is established.
Net earnings FY-2023 FY-2024 Change FY24/FY23
(USD Million) Volume Volume in Volume
Lebanese Entities
-85
-39
46
Private Banking Entities
-1
27
28
Bank Audi France
13
17
4
Other Entities
2
5
3
Entities held for sale
71
-10
-81
Total
0
0
0
Normalised net earnings FY-2023 FY-2024 Change FY24/FY23
(USD Million) Volume Share in Total Volume Share in Total in Volume in %
Lebanese Entities
196
64.1%
138
79.8%
-58
-29.6%
Private Banking Entities
21
6.9%
21
12.1%
0
0.0%
Bank Audi France
13
4.2%
17
9.8%
4
30.8%
Other Entities
5
1.6%
7
4.1%
2
40.0%
Entities held for sale
71
23.2%
-10
-5.8%
-81
-114.1%
Total
306
100.0%
173
100.0%
-133
-43.5%
OPERATION IN TURKIYE
Turkiye in 2024 witnessed a gradual shift aimed at redirecting domestic demand from consumption to investment and exports, in tandem with hikes in policy rates setting the stage for prolonged tight financial conditions. Despite these efforts, headline inflation continued to be significantly driven by unfavorable base effects and strong price pressures. The tighter policy mix dampened economic growth while the banking sector’s activity contracted, conducing to a noticeable decline in profitability.
On this backdrop, total assets of Odea Bank expressed in Turkish Lira decreased nominally by TRY 4.4 billion in 2024, reaching TRY 79.2 billion as at end-December 2024. In real terms, assets of Odea Bank declined by TRY 12.1 billion, an evolution partially offset by a positive FX translation impact of the depreciation of the Turkish Lira versus the USD across the period. Conversely when expressed in USD, assets of Odea Bank declined by USD 594 million
of which USD 342 million of real decrease with a negative FX translation effect of USD 252 million.
In parallel, customer deposits dropped from TRY 58.3 billion as at end-December 2023 to TRY 48.1 billion as at end-December 2024 while customer loans decreased to TRY 26.9 billion from TRY 31 billion as at end-December 2023. The ratio of stage 3 loans to gross loans stood at 4.1% as the same date, down from 4.6% at end-December 2023, with a coverage of those loans by specific provisions of 75.8% excluding collaterals. Odea Bank contribution to consolidated profits dropped significantly during the year turning negative with a loss of USD 10 million compared to net profits of USD 71 million in the corresponding period of last year, as the Bank registered negative net interest margin following a steep increase in funding cost resulting from the prevailing restrictive monetary policy applied by local authorities to curb the ramping inflation.
What follows is a brief discussion of the overall trends across main constituents of the Group:
(in TRY Million) Dec-23 Dec-24
Balance sheet data
Change in Volume
Dec-24 / Dec-23
2. PRIVATE BANKING ENTITIES
Private Banking entities led by Banque Audi (Suisse) reported net profits of USD 21.4 million in 2024 compared to USD 21.3 million in 2023.
Client assets at Bank Audi Private Bank, which include both deposits and off-balance sheet Assets under Management (AuMs), such as fiduciary deposits and custody accounts, remained stable year-on-
year at USD 5.9 billion. This stability was primarily driven by client account closures following a strategic portfolio review and net new money (NNM) outflows from existing clients. These factors were offset by favorable market conditions and the successful acquisition of new clients, a noteworthy achievement given the ongoing Lebanese crisis, further exacerbated by the Israeli-Lebanese conflict during the year.
Assets
83,604
79,171
-4,433
Deposits
58,342
48,112
-10,230
Loans
31,566
26,942
-4,624
Equity
6,111
5,584
-527
Outstanding LCs + LGs
12,289
15,132
2,843
Earnings data
FY-2023
FY-2024
Change
Total income
4,276
1,688
-2,588
Net profits
1,710
-330
-2,040
Spread
2.5%
-2.5%
-5.0%
ROAA
2.3%
-0.5%
-2.8%
ROACE
31.3%
-7.3%
-38.6%
(USD Million) Dec-23 Dec-24
On-Balance Sheet Assets
1,235
1,385
150
12.1%
Total Client Assets
5,887
5,866
-21
-0.4%
o.w. AuMs (Off-Balance Sheet)
3,993
3,920
-73
-1.8%
o.w. Deposits (On-Balance Sheet)
770
837
67
8.8%
o.w. Fiduciary Deposits (Off-Balance sheet)
1,124
1,109
-15
-1.3%
Client Loans
369
425
56
15.2%
Equity
362
362
0
Normalized Earnings data
FY-2023
FY-2024
Change in Volume YoY
Change in % FY24 / FY23
Total income 80.5
83.9
3.4
4.2%
Net profits
21.3
21.4
0.1
0.3%
Spread (on AA +AAuMs)
0.6%
0.6%
0.0%
ROAA+AAuMs
0.3%
0.3%
0.0%
ROACE
6.7%
6.5%
-0.2%
Balance sheet data
Change in Vol. Dec-24 / Dec-23
Change in % Dec-24 / Dec-23
In November 2023, and given the significant requirement of Odea Bank for capital needs to sustain its growth at the current level amidst a continuing devaluation of the Turkish Lira, the Board of Directors resolved to divest of its investment in the Turkish subsidiary. Following a due diligence and negotiation process, Bank Audi, in addition to other shareholders, have entered, on 14 October 2024, into definitive transaction agreements with ADQ Financial Services LLC, a subsidiary of Abu Dhabi Developmental Holding Company PJSC (ADQ), for the acquisition of 96% of the share capital of Odea Bank A.Ş. by ADQ and certain related companies. Pursuant to the agreement, Bank Audi has agreed to sell its 76.4% interest in the share capital of Odeabank, along with International Finance
Corporation (IFC), IFC FIG Investment Company Sarl (IFC FIG Fund) and European Bank for Reconstruction and Development (EBRD), and another private investor, as sellers. The transaction completed on 26 March 2025, following the satisfaction of customary regulatory conditions, including obtaining the approvals of the Banking Regulation and Supervision Authority and the Competition Authority in Türkiye. This transaction aligns well with Bank Audi Group’s present strategic focus on its home market. Until closing, the operation of Odea Bank, and in compliance with IFRS, was treated as a discontinued operation as at end-December 2024 the same way it was in the financials as at end-December 2023.
ENTITIES IN OTHER COUNTRIES OF PRESENCE
The entities operating in other countries performed well in 2024.
1. BANK AUDI FRANCE
In 2024, assets of Bank Audi France increased by USD 42 million, from USD 1.27 billion as at end-December 2023 to USD 1.31 billion as at end-December 2024. In parallel, customer’s deposits of Bank Audi France rose from USD 1.10 billion as at end-December 2023
to USD 1.13 billion as at end-December 2024, corresponding to an increase by USD 34 million. Loans to customers dropped by USD 16 million to USD 343 million as at end-December 2024 . Bank Audi France achieved net profits of USD 16 million in 2024 compared to USD 13.4 million during 2023. Higher interest and non-interest income generation coupled with stable cost base stand behind the year-on-year improvement in both European entities.
In Saudi Arabia, Audi Capital KSA, adopted a new growth strategy believed to be based on a foundation of steady, methodical expansion, underpinned by a diversified product offering, a clear market focus, and strategic organizational changes, including and not restricted to new Management appointments. The roll out of the growth plan has progressed significantly and the financial company is looking to launch a series of Funds. In 2024, Audi Capital KSA reported net profits of USD 0.6 million compared to a loss of – USD 0.9 million in 2023.
3. BANK AUDI (QATAR)
In the MENA region, Bank Audi Qatar’s lending activity was reinforced with an increase in net loans by USD 3 million. Subsequently Bank Audi Qatar’s net loans reached USD 96 million as at end-December 2024, compared to USD 93 Million as at end-December 2023. The Qatari entity’s net profits reached USD 5.3 million in 2024, compared to USD 3.1 million in 2023.
(USD Million) Dec-23 Dec-24
Assets
1,266
1,308
42
Deposits
1,098
1,132
34
Loans
359
343
-16
Equity
119
127
8
Outstanding LCs + LGs
54
80
26
Earnings data
2023
2024
Change FY 2024 / 2023
Total income
48.8
48.4
-0.4
Net profits
13.4
16.0
2.6
ROAA
1.2%
1.5%
0.3%
ROAE
12.3%
15.7%
3.4%
Balance sheet data
Change in Volume
Dec-24 / Dec-23
ABIDANCE BY REGULATORY REQUIREMENTS
In response to the tough operating conditions prevailing in Lebanon because of the war, the Central Bank of Lebanon issued or amended a number of circulars as follows:
Amending Basic Circulars 158 and 166 respectively by increasing monthly payments on ad-hoc basis, whereby exceptionally, selected beneficiaries were allowed to withdraw two additional payments in Oct-24 and one additional payment in Nov-24, Dec-24 and Jan-
25. In parallel, BdL provided the related liquidity from the banks’ reserve requirements in foreign currency at BdL, thus resulting in future savings on the Bank’s fresh liquidity by USD15mn.
Amending Basic Circular 166, by removing the previously set conditions restricting customers who have converted LBP deposits in excess of USD 300 thousands to USD after October 2019 from benefiting from BdL Basic Circular 166.
Amending BdL Basic Circular 147: whereby Banks were asked to accept the return of unsettled issued bankers’ checks into all accounts, thus allowing depositors to benefit from applicable BdL circulars.
A comprehensive list of the key regulations issued over the recent years is included in Note 1 of the enclosed audited financial statements.
NON-FINANCIAL RISKS: LITIGATIONS
The restrictive measures that the Lebanese banks had to adopt in relation to the withdrawal of funds and transfers abroad are exposing all banks, including ours, to increased litigations in Lebanon and abroad. Although litigations are a common occurrence in the banking industry due to the nature of the business and for which the Bank has an established remedial protocol, claims tied to these restrictive measures, among others, are beyond its control. Litigations related to the crisis are dealt with on a case-by-case basis when they occur. Management is carefully considering the impact of these litigations and claims. Meanwhile, the Bank believes that a legislative solution is urgently needed through the enactment of
Directors, as well as a number of current/former employees, were the target of orders banning them from disposing of their assets in addition to accusations of violation of the Bank secrecy law. Bank Audi sal has so far sought diverse legal expertise on the matter: common consensus converges toward the fact that the claims of the Public Prosecutor of Appeal in Mount Lebanon are baseless and with no legal grounds. H.E. the Prime Minister Designate of Lebanon’s sent a letter to the Ministry of Interior dated 22 February 2023, requesting H.E the Minister of Interior to instruct all Internal Security Forces – General Directorate not to execute any decision or order by the said Prosecutor in relation with the above accusations.
end-December 2023 to TRY 35.32 per USD as at end-December 2024), representing a negative USD 252 million.
In November 2023, and given the significant requirement of Odea Bank for capital needs to sustain its growth at the current level amidst a continuing devaluation of the Turkish Lira, the Board of Directors resolved to divest of its investment in the Turkish subsidiary. Until completion on 26 March 2025, the operation of Odea Bank, and in compliance with IFRS, was to be treated as a
discontinued operation and accordingly its financials were not reflected in the line-by-line structure of the Statement of Financial Position as at end-December 2023 and as at end-December 2024. Rather, its assets and liabilities were booked under « assets held for sale » and « liabilities held for sale » respectively (sub captions of « other assets and other liabilities » in the Summarized Statement of Financial Position below). In the Income Statement, the net profits generated by this discontinued operation in the years 2023 and 2024 were booked under « results from discontinued operations ».
laws that are appropriate for the adjudication of the unconventional legal disputes arising under the current exceptional circumstances.
Recently, less cases have been filed against Bank Audi in Lebanon
H.E. the Minister of Interior sent such communication on the same date. Furthermore, on 28 February 2023, the Attorney General of Lebanon instructed the Prosecutor to stop the investigations and inquiries against the Bank, as well as other banks, until the state
The table below sets out the evolution of the Group’s financial position as at end-December 2024, compared to end-December 2023:
Summarised Statement of Financial Position
and abroad; the rulings have been issued in favor of the bank in Lebanon and abroad the foreign courts have considered themselves non-competent to rule over cross-border matters.
Among the aforementioned litigations of systemic nature, a complaint was filed on 22 February 2022 by a group of lawyers under the name » ماظنلا حالصإ ديري ựعشلا » against « Lebanese banks » and the chairmen of their boards of directors for alleged committed crimes of tort and fraudulent bankruptcy, money laundering, fraud and breach of trust. Since then, as a result of this complaint, the former Public Prosecutor of Appeal in Mount Lebanon judge Ghada Aoun exceeding her attributions and in flagrant violation of the law, initiated several procedures and issued several decisions in this respect on selected banks, that differ from bank to bank. These included clarification sessions, interrogations, requests of specific data, examination of data by appointed experts, restraining orders, travel bans, prohibition of disposal of assets…
prosecution request, filed as a result of her actions, has been ruled upon and the decision rendered. On 4 May 2023, a decision was rendered by disciplinary judges in Lebanon to suspend and dismiss the Public Prosecutor of appeal in Mount Lebanon for her services, based on several complaints raised by several parties in claims handled by the latter, noting that the decision is subject to appeal to the Supreme Disciplinary Authority. At present, the case is with the Investigative Judge, and Management and its legal counsels are in the opinion that the case will be dismissed for the total lack of legal grounds. In addition, money laundering accusations were recently made against the Chairman and a member of the Board of Directors of the Bank, as well as officers of other Lebanese banks by the same Public Prosecutor of Mount Lebanon who was acting beyond her jurisdiction.
In addition, the Group may, from time to time, become involved in
other legal or arbitration proceedings which may affect its operations
(USD Million) Dec-23 Dec-24
Cash & placements with banks and central banks
11,555
11,341
-214
-1.9%
Portfolio securities
1,707
1,740
33
1.9%
Loans to customers and related parties
1,049
963
-86
-8.2%
Other assets*
3,015
2,365
-650
-21.5%
Fixed assets
1,239
256
-983
-79.4%
Assets = Liabilities + Equity
18,566
16,665
-1,901
-10.2%
Bank deposits
357
295
-62
-17.3%
Customers’ deposits and related parties
12,806
12,416
-390
-3.0%
Subordinated debt
271
268
-3
-1.1%
Other liabilities**
3,394
2,731
-663
-19.5%
Shareholders’ equity (profit included)
1,738
955
-783
-45.0%
AUMs + fid. dep. + cust. acc.
7,823
7,914
91
1.2%
Assets + AUMS
26,389
24,579
-1,810
-6.9%
* In 2024 and 2023, other assets include assets held for sale amounting to USD 2,242 million and USD 2,836 million respectively.
Change in Vol.
Dec-24 / Dec-23
Change in
%
With respect to Bank Audi sal, the Bank, members of its Board of
and results.
** In 2024 and 2023, other liabilities include liabilities held for sale amounting to USD 2,033 million and USD 2,629 million respectively.
CONSOLIDATED FINANCIAL OVERVIEW IN 2024
In details, consolidated deposits fell from USD 12.8 billion at end-December 2023 to USD 12.4 billion, corresponding to a decrease of USD 390 million. By segment:
million, mostly from repayment of loans in restricted dollars amid a net increase in loans in fresh dollars by USD 10 million. Loans in foreign currencies booked in Lebanese entities totaled USD 95
The Bank’s financial statements have been prepared in accordance with regulatory requirements, particularly regarding the translation of foreign currencies into Lebanese Pounds (LBP) using the official exchange rates provided by the Central Bank of Lebanon. As mandated, Bank Audi publishes its figures in LBP, translating balances and transactions in foreign currencies-predominantly USD-using the prevailing official exchange rate. For the periods reported, the official exchange rate was LBP 15,000 per USD at end-December 2023 and LBP 89,500 per USD as at end-December 2024 .
All figures in the following analysis are expressed in US Dollars (USD), unless stated otherwise. These figures have been translated from LBP using the official exchange rates mentioned above.
Given the presence of multiple exchange rates in Lebanon due to the ongoing financial crisis, the results of Lebanese entities may not accurately represent absolute values and are intended solely to illustrate the evolution of key indicators.
Consolidated assets of Bank Audi, translated from Lebanese Pounds at the official exchange rates for the periods, stood at USD 16.7 billion as at end-December 2024, compared to USD 18.6 billion
as at end-December 2023, i.e. decreasing by USD 1.9 billion. This evolution is attributed primarily the change in the official exchange which brings in an FX dimension to the evolution of aggregates across the period, taking into account the currency structure of the said aggregate. Consolidated assets denominated in Lebanese Pounds decreased over the same period by USD 1.3 billion, from USD 1.7 billion as at end-December 2023 to USD 414 million as at end-December 2024, driven by a devaluation once again in February 2024 of the Official exchange rate of the Lebanese Pounds to the USD. Consolidated assets denominated in foreign currencies decreased by USD 598 billion, broken down over a decrease by USD 594 million in assets of Odea Bank, partially offset by an increase in assets by USD 191 million in other entities operating outside Lebanon within a contraction by USD 195 million for the assets of Lebanese entities denominated in foreign currencies.
The negative contribution of Odea Bank to the evolution of consolidated assets in 2024, is explained by a real decline in the assets of the Turkish entity by USD 342 million during the year within a negative translation impact from the devaluation of the Turkish Lira during the year, (from TRY 29.48 per USD as at
Lebanese entities accounted for USD 468 million of the contraction in consolidated deposits, with the devaluation of the LBP driving a decrease in deposits denominated in LBP by USD 325 million. Deposits in foreign currencies of Lebanese entities decreased by USD 143 million.
Deposits from entities operating abroad increased by USD 79 million, reflecting increases of deposits in Banque Audi (Suisse) by USD 66 million and Bank Audi France by USD 34 million, amid decreasing deposit base in Bank Audi Qatar by USD 21 million.
On the uses side, consolidated net loans declined by USD 86 million, from USD 1,049 million as at end-December 2023 to USD 963 million as at end-December 2024 (excluding Odea Bank since it is accounted as discontinued operations under Other Assets). This decrease was driven by:
A reduction of loans booked in Lebanese entities by USD 129 million, with USD 57 billion of this decline attributed to loans denominated in LBP. Loans in foreign currencies fell by USD 72
million as at end-December 2024,
An increase of USD 43 million in loans from entities outside Lebanon, representing notably an increase by USD 56 million in Lombard loans at Banque Audi (Suisse) offset by a USD 16 million decrease at Bank Audi France. Loans of Bank Audi Qatar rose by some USD 3 million during the year.
Consolidated assets under management, including fiduciary deposits and custody accounts were stable, standing at USD 7.9 billion as at end-December 2024 compared to USD 7.8 billion as at end-December 2023. By entity, assets under management of Banque Audi (Suisse) declined over the same period by USD 28 million, offset by increases in assets under management in Lebanese entities by USD 88 million, in Bank Audi (Qatar) by USD 19 million and in Audi Capital (KSA) by USD 11 million. Subsequently, the aggregate of consolidated assets and AuMs, including fiduciary deposits, custody accounts and AuMs reached USD 24.6 billion at end-December 2024, compared to USD 26.4 billion as at end-December 2023, underscoring a contraction by 6.9%.
BREAKDOWN BY GEOGRAPHY
The following table sets out a breakdown of the Bank’s assets, customers’ deposits and loans by geography as at the dates indicated:
Dec-23 Dec-24 Change Dec-23 Dec-24 Change Dec-23 Dec-24 Change
By region
Lebanon 70.5%
Abroad 29.5%
69.5%
30.5%
-1.0% 84.8%
1.0% 15.2%
83.7%
16.3%
-1.1% 21.8%
1.1% 78.2%
10.3%
89.7%
-11.5%
11.5%
Lebanese Pounds (LBP) are translated to US Dollar at the closing official exchange rates (LBP 15,000/USD as at end-December 2023 and 89,500/USD as at end-December 2024) published by the Central Bank of Lebanon, in line with IAS 21 due to the lack of an alternative legal exchange mechanism.
As at end-December 2024, the Bank’s consolidated assets totaled USD 16.7 billion. This comprises:
ASSET ALLOCATION BY TYPE
USD 414 million in assets denominated in Lebanese Pounds (LBP) compared to USD 1,716 million as at end-December 2023,
USD 6.4 billion in unrestricted assets denominated in foreign currencies (fresh), including assets from foreign entities, compared to USD 6.7 million as at end-December 2023,
USD 9.9 billion in restricted assets in foreign currencies, compared to USD 10.2 billion as at end-December 2023.
30.5% of consolidated assets are booked in entities outside Lebanon as at end-December 2024, compared to 29.5% as at end-December 2023. Entities outside Lebanon also accounted for 89.7% of consolidated net loans compared 78.2% as at end-December 2023. The evolution is explained by a continued derisking of the loan portfolio in Lebanese entities reaching a mere USD 106 million as
at end-December 2024, within an increased share of loan booking in the entities abroad. Likewise, entities outside Lebanon accounted for 16.3% of consolidated customers’ deposits as at end-December 2024, compared to 15.2% as at end-December 2023.
The allocation of consolidated assets continued to be skewed towards cash and placements with banks and central banks, which account for close to 68% of total uses as at end-December 2024, followed by a share of 10% for the consolidated portfolio securities, a mere 6% for net loans, 14% for other assets and 2% for fixed assets. This is compared to shares of 62%, 9%, 6%, 16% and 7% respectively as at end-December 2023. This shift of the share of fixed
assets from 7% to 2% across the year is attributed to an inflationary effect from FX translation following the earlier inclusion of surplus gains from the revaluation of real estate properties at a rate of LBP 89,500 per USD at a time where the reporting rate was LBP 15,000 per USD in December 2023. The adjustment of the official exchange rate to LBP 89,500 per USD in 2024 has normalized this impact.
BREAKDOWN BY CURRENCY
Due to Lebanon’s ongoing crisis since 2019, including unofficial capital controls, multiple exchange rates, hyperinflation, and potential government reforms, the Bank’s consolidated financial statements do not reflect the disclosures required by IAS 29 for hyperinflationary economies. Consequently, the Lebanese market distinguishes between onshore and offshore assets and liabilities, as well as foreign currency bank accounts subject to capital controls and those free from them. This differentiation arises from varying perceptions of real economic value, leading to terms like « lollars » for local US Dollar accounts under capital controls and « fresh accounts » for foreign currency accounts without such controls.
The table below details the breakdown of consolidated assets, deposits, and loans by currency, highlighting amounts in Lebanese Pounds (LBP) and foreign currencies. The foreign currency amounts are further categorized into restricted amounts (Lollars) and unrestricted amounts (labeled as fresh), reflecting the current market definitions in Lebanon since the onset of the crisis.
This breakdown provides insight into the currency composition of the Bank’s financial position, which is crucial for understanding liquidity and risk exposure in the current economic environment.
The charts below highlight the structure of the consolidated uses as at end-December 2024 compared to end-December 2023:
Assets Breakdown
2023
62%
7%2024
68%
14%
2%
Breakdown by Foreign Currency – Local vs « Fresh »
Cash & placements
with banks and central banks
Portfolio securities
Net loans
Other assetsFixed assets
Dec-2024
(USD Million)
LBP
FCY
Total
LBP & FCY
o.w. Lollars(*)
o.w. Fresh(**)
Total FCY
Loans and advances to customers and related parties
4
79
880
959
963
Total assets
414
9,902
6,349
16,251
16,665
Deposits from customers and related parties
66
9,690
2,660
12,350
12,416
The contribution of Odea Bank justifies the sizeable share of other assets in the total across both dates.
CHANGES IN PLACEMENTS WITH CENTRAL BANKS AND BANKS
Dec-2023
(USD Million)
LBP
FCY
Total
LBP & FCY
o.w. Lollars(*)
o.w. Fresh(**)
Total FCY
Loans and advances to customers and related parties
62
161
826
987
1,049
Total assets
1,716
10,200
6,650
16,850
18,566
Deposits from customers and related parties
392
9,994
2,420
12,414
12,806
The Bank’s consolidated placements with central banks and banks, which primarily consist of cash and amounts held at central banks (including free accounts and compulsory reserves, but excluding certificates of deposit issued by the Central Bank of Lebanon),
placements with banks, loans to banks, and reverse repurchase facilities with central banks and financial institutions, moved marginally from USD 11.6 billion as at end-December 2023 to USD 11.3 billion as at end- December 2024.
Change Dec-2024 – Dec-2023 in %
LBP
FCY
Total
LBP & FCY
o.w. Lollars(*)
o.w. Fresh(**)
Total FCY
Loans and advances to customers and related parties
-93.5%
-51.0%
6.5%
-2.8%
-8.2%
Total assets
-75.9%
-2.9%
-4.5%
-3.6%
-10.2%
Deposits from customers and related parties
-83.1%
-3.0%
9.9%
-0.5%
-3.0%
(*)Onshore assets and liabilities in foreign currencies subject to unofficial capital controls in Lebanon.
(**) Offshore assets and liabilities in foreign currencies not subject to capital controls in Lebanon.
The table below sets out a breakdown of placements with central banks and banks by type and currency as at end-December 2024:
Placements with Central Bank and Banks (Excluding CDs)
Cash and placements with Central Banks
47
8,768
667
183
9,665
o.w. Reserves requirements
15
1,325
10
1,350
o.w. Cash deposits
32
7,443
657
183
8,315
Placements with banks
1.5
1,374
89
211
1,676
Total Placements
49
10,142
756
394
11,341
(USD Million) LBP USD EUR OTHERS TOTAL
The Bank’s placements in Lebanese Pounds primarily consist of cash and deposits with the Central Bank of Lebanon. These placements fell from USD 195 million at end-December 2023 (corresponding to LBP 2,925 billion) to a low of USD 49 million by end-December 2024
increase in placement with the Central Bank by Banque Audi (Suisse) by USD 131 million. In relative terms, these placements represented 77.9% of the consolidated customer deposits denominated in foreign currencies totaling of USD 12.4 billion at the same date.
The following table sets out the distribution of the Bank’s securities portfolio by type of security as at the dates indicated:
Portfolio Securities Breakdown
Change in
Change in
(corresponding to LBP 4,341 billion). Driven by a negative translation
Of these, foreign currency placements in cash deposits with
(USD Million) Dec-23 Dec-24
Volume %
effect of the devaluation of the official rate, this drop stems from a USD 71 million reduction in decrease in cash deposits at the Central Bank and a USD 73 million decrease in reserve requirements within a decrease in placements with banks by USD 3 million. The ratio of placements in Lebanese Pounds to deposits in the same currency rose from 49.8% as at end-December 2023 to 72.8% by end-December 2024, indicating that the decrease in LBP placements was slower than that of customer deposits in LBP.
The Bank’s foreign currency placements with Central Banks, which include cash and short-term deposits with the Central Bank of Lebanon and other central banks (excluding BdL-issued certificates of deposit), reached USD 9.6 billion as at end-December 2024, slightly lower than the USD 9.7 billion as at end-December 2023. The movement in consolidated placements in foreign currencies with Central Banks represent decreases in foreign currencies’ placements with the Central Bank in Lebanese entities by USD 175 million and in Bank Audi France by USD 71 million, offset by an
central banks amounted to USD 8.3 billion with almost no change relative to end-December 2023, with the remainder in reserve requirements (USD 1.3 billion).
Additionally, placements with correspondent banks denominated in foreign currencies amounted to USD 1.7 billion as at end-December 2024, almost the same level as at end-December 2023, representing 13.6% of foreign currency-denominated deposits (compared to 13.3% as at end-December 2023). As at end-December 2024, Bank Audi Lebanon held USD 585 million of free liquidity in foreign currencies after netting external account deposits of USD 562 million.
The Bank’s placements with correspondent banks are mainly based in low risk OECD and GCC countries that show high levels of solvency and financial and monetary stability. 96% of the placements (excluding reverse repo agreements) denominated in foreign currencies are held in banks rated A3 or better.
Central Bank of Lebanon certificates of deposit 682 651 -31 -4.5%
LBP-denominated
4
0
-4
-100%
Foreign currency-denominated
678
651
-27
-4.0%
Net Lebanese Treasury bills and Eurobonds 164 96 -68 -41.5%
LBP-denominated
137
23
-114
-83.2%
Foreign currency-denominated
27
73
46
170.4%
Risk-ceded government Eurobonds 10 10 0 0%
10
Foreign currency-denominated
0%
0
Other non-Lebanese sovereign securities 420 392 -28 -6.7%
USD
365
204
-161
-44.1%
EUR
55
188
133
241.8%
Other fixed income securities 285 438 153 53.7%
Foreign currency-denominated
53.7%
153
285
Equity securities 147 153 6 4.1%
LBP-denominated
Foreign currency-denominated
113
34
125
28
13
-6
11.5%
-17.6%
Total portfolio securities
1,707
1,740
33
1.9%
The charts below set out the breakdown of money market placements held with banks (excluding reverse repo agreements) as at end-December 2024 by rating and geographic location:
Breakdown of Placements with Banks by Rating in 2024
2024
53%
.5%
3%
0.5%
0
Aaa to Aa3
A1 to A3
Baa1 to Baa3
Ba1 to Ba3
Not rated
Breakdown of Placements with Banks by Region in 2024
2024
79%
17%
1%
Lebanese Central Bank Certificates of Deposit Portfolio
The Bank’s exposure to the Central Bank of Lebanon through certificates of deposit in foreign currency, contracted by USD 27 million, dropping from USD 678 million to USD 651 million, largely due to the decrease in restricted deposits and the application of BdL basic circulars 158, 166 and 151. When including free account placements at the Central Bank in foreign currencies net of borrowings from BdL, total exposure to BdL in foreign currencies reached USD 8,929 million as of end-December 2024, down from USD 8,965 million at end-December 2023. This amount is net of an Expected Credit Loss (ECL) of USD 195 million, which remained unchanged till date. Meanwhile, the Bank is allocating all pre-provision pretax profits to provisions for risk and charges with an aim to allocate those assets to any assets as needed until such time when a recovery plan is in place.
Exposure to Lebanese Securities
The Group’s exposure to Lebanese securities decreased by USD 67 million in 2024, primarily reflecting negative foreign exchange impacts on Treasury bills reaching a negative USD 114 million. The exposure to Lebanese sovereign Eurobonds, net of ECLs, increased by USD 46 million, bringing the total to USD 73 million. The change
in Euro-denominated securities. As at end-December 2024, the non-Lebanese sovereign bonds constituted 22.5% of the total securities portfolio, compared to 24.6% at the end of December 2023. They represented 3.2% of foreign currency-denominated customer deposits, down from 3.4% at the end of 2023.
Other International Fixed Income Securities
The Bank’s exposure to other international fixed income securities stood at USD 438 million as at end-December 2024 compared to USD 285 million as at end-December 2023, representing an increase by USD 153 million. This is mainly due to the increase of bonds portfolio related to banks and financial institutions issuers by USD 229 million. The portfolio is now more concentrated on banks and financial institutions issuers which represent 76.7% of the total portfolio compared to 37.3% (when excluding ODEA) as at end-December 2023, while corporate issuers accounted for 23.3% compared to 27.3% as at end-December 2023. The remaining end-December 2023 exposure was against instruments categorized under « loans to customers at fair value through P&L ».
IFRS Classification of Portfolio Securities
The classification of the Bank’s securities portfolio across various
G10 countries
CHANGES IN SECURITIES’ PORTFOLIO
Europe
MENAGCC
reflects predominantly the increase in the market price of these instruments, which are held in the Fair value thru Profit and Loss portfolio and benefitting from a Mark to Market valuation.
Non-Lebanese Sovereign Securities
asset classes is determined by each Group entity’s business model for managing financial assets and the contractual cash flow characteristics of these assets. Initially, all assets are measured at fair value plus, for financial assets not valued at fair value through profit or loss, the specific transaction costs. Subsequently,
The Bank’s securities portfolio, which includes certificates of deposit issued by the Central Bank of Lebanon, Lebanese Pound-denominated Treasury bills, foreign currency Lebanese-sovereign bonds, non-Lebanese sovereign bonds, other fixed-income instruments, and equity securities, increased in 2024 by USD 33 million, to USD 1,740 million at end-December 2024 from USD 1,707 million by end-December 2023.
By currency, the increase in the portfolio included a decrease of USD 105 million in securities denominated in Lebanese Pounds, driven by the adoption of the new official exchange rate. On the opposite, the portfolio of securities denominated in foreign currencies increased by USD 138 million.
The Bank’s exposure to non-Lebanese sovereign risk decreased by USD 28 million, falling from USD 420 million to USD 392 million between end-December 2023 and end-December 2024. The decrease was influenced by a USD 161 million decline in USD-denominated securities offsetting a USD 133 million increase
assets are measured at amortized cost, fair value through other comprehensive income (FVOCI), or fair value through profit or loss (FVTPL).
The table below sets out the distribution of the Bank’s securities portfolio by asset class and currencies as follows:
Portfolio Securities by Asset Class
Change in
Change in
highlighted by the adjustment of the official exchange rate from USD/LBP 15,000 to USD/LBP 89,500 early 2024, and, the increased collection efforts focusing on settling non-performing loans (NPLs).
facilities to Lebanese customers to counter heightened competition in the corporate sector and support retail loans for employees of reputable corporate clients. In spite of this, the lending activity in fresh dollars remained limited in 2024, dampened by the
(USD Million) Dec-23 Dec-24
Volume %
Going forward, selective lending continues for strategic clients in defensive sectors in Lebanese Pounds and in foreign currencies. In fact, the Board of Directors decided late 2023 to extend credit
challenging operating conditions and the repercussion of the war
on Lebanon on investment sentiment.
Financial assets held at FVTPL
291
141
-150
-51.5%
Foreign currency-denominated
291
141
-150
-51.5%
Financial assets designated at fair value through OCI
135
341
206
152.6%
LBP-denominated
112
124
12
10.7%
Foreign currency-denominated
23
217
194
843.5%
Financial assets classified at amortised cost
1,282
1,258
-24
-1.9%
LBP-denominated
141
23
-118
-83.7%
Foreign currency-denominated
1,141
1,235
94
8.2%
TOTAL PORTFOLIO SECURITIES
1,707
1,740
33
1.9%
LBP-denominated
252
147
-105
-41.7%
Foreign currency-denominated
1,455
1,593
138
9.5%
ANALYSIS OF LOANS BY CURRENCY
Following the adjustment in the official exchange rate, the share of foreign currency loans in the total net loan portfolio surged to 96% as
at end-December 2024, up from 73% at end-December 2023, despite an overall decline in foreign currency loans over the same period.
As at end-December 2024, financial assets classified at amortized cost represented 72.3% of the portfolio, down from 75.1% as at end-December 2023 while assets held at FVTPL decreased to 8.1%
from 17% during the same period. Conversely, assets designated at FVOCI increased to 19.6% from 7.9%.
ANALYSIS OF LOAN QUALITY*
Lebanese Entities
Credit-impaired loans
321
224
-97
o.w. Corporate
251
195
-56
o.w. Retail
70
29
-41
(USD Million) Dec-23 Dec-24
Change
Dec-24/Dec-23
The following table sets out the distribution of financial assets classified at amortized cost by type of security, as at end-December 2024 as compared to end-December 2023:
Net loans 228 99 -129
Distribution of Financial Assets Classified at Amortised Cost by Type
Central Bank of Lebanon Certificates of Deposit
683
652
-31
-4.5%
Net Lebanese Treasury Bills and Eurobonds
152
13
-139
-91.4%
Risk-ceded Government Eurobonds
10
10
0
0%
Other non-Lebanese sovereign securities
257
347
90
35.0%
Other fixed income securities
180
236
57
31.7%
Financial assets classified at Amortized Cost
1,282
1,258
-24
-1.8%
(USD Million) Dec-23 Dec-24
o.w. Corporate
62.6%
73.5%
10.9%
o.w. Retail
70.4%
74.4%
4.0%
Change in Volume
o.w. Corporate
200
86
-114
o.w. Retail
28
13
-15
Allowance for ECL Stage 3
252
176
-76
Allowance for ECL Stages 1 & 2
19
30
12
Credit-impaired loans/Gross loans
64.2%
73.2%
9.0%
Net credit-impaired loans/Gross loans
13.7%
15.5%
1.8%
Credit-impaired loans coverage
78.6%
78.8%
0.2%
Allowance for ECL Stages 1 & 2/Net loans
8.4%
30.4%
22.0%
o.w. Corporate
184
150
-34
o.w. Retail
68
26
-42
Change in
o.w. Corporate
16
30
14
o.w. Retail
3
0.58
-2
%
The distribution of financial assets classified at amortized cost by security type remained stable as at end-December 2024 relative to end-December 2023. The portfolio was primarily composed of Certificates of Deposit (CDs) issued by the Central Bank of Lebanon (BdL), accounting for 51.8% of the amortized cost assets.
LOAN PORTFOLIO
This is consistent with trends observed in previous years. Other non-Lebanese sovereign bonds accounted for 27.6% while other fixed income securities had a share of 18.8% with the remainder accounted for by Lebanese sovereign securities.
o.w. Corporate
73.5%
76.9%
3.4%
o.w. Retail
96.9%
89.7%
-7.2%
o.w. Corporate
8.1%
34.9%
26.8%
o.w. Retail
10.9%
4.5%
-6.4%
o.w. Corporate
16.6%
17.1%
0.5%
o.w. Retail
2.2%
7.7%
5.5%
(*)As per IFRS 9.
In November 2023, the Board of Directors resolved to exit the Bank’s investment in Turkiye, a direction which was confirmed on 14 October 2024 with the execution of definitive agreements with ADQ for the sale of the Bank’s subsidiary, Odea Bank. Until completion of the transaction on 28 March 2025, the operation of Odea Bank, and in compliance with IFRS, is treated as a discontinued operation and accordingly its financials, including customers loans, were not reflected in the line-by-line structure
LEBANESE ENTITIES
The net loan portfolio of Lebanese entities has contracted by USD 129 million in 2024 with USD 57 million of this decline attributed to loans denominated in LBP. Loans in foreign currencies fell by USD 72 million, mostly from repayment of loans in restricted dollars
of the Statement of Financial Position as at end-December 2023 and as et end-December 2024. Rather, its assets and liabilities were booked under « assets held for sale » and « liabilities held for sale » respectively.
In what follows, we analyze separately the evolution of the loan portfolio of Lebanese entities in the year 2024 and that of the loan portfolio of entities abroad, excluding Odea Bank.
amid a net increase in loans in fresh dollars by USD 10 million. Loans in foreign currencies booked in Lebanese entities totaled USD 95 million as at end-December 2024. The decline of the net loan portfolio reflects the devaluation of the Lebanese Pound as
CREDIT-IMPAIRED LOANS OF LEBANESE ENTITIES
Credit-impaired loans for Lebanese entities continued to decline, decreasing by another USD 97 million to USD 224 million as of end-December 2024 from USD 321 million as at end-December 2023. This decrease was mainly attributed to sustained collection efforts, with breakdowns indicating a USD 56 million reduction in corporate/commercial loans and USD 8 million in retail loans along with a write-off of USD 33 million. Consequently, provisions were released, resulting in a USD 76 million decrease in total allowances for Expected Credit Loss (ECL) under Stage 3. As of end-December 2024, the coverage ratio for credit-impaired loans stood at 78.8%, up from 78.6% as at end-December 2023.
The ratio of credit-impaired loans to gross loans increased markedly from 64.2% at end-December 2023 to 73.2% at end-December 2024. This rise is primarily due to the significant contraction of the total loan portfolio, coupled with the increased official exchange rate of the US Dollar against the Lebanese Pound (LBP). Most credit-impaired loans are denominated in foreign currency, amplifying the ratio’s increase.
ENTITIES OPERATING OUTSIDE LEBANON ANALYSIS OF LOANS BY TYPE OF CUSTOMER
The analysis that follows of the loan portfolio of entities operating
outside Lebanon excludes the contribution of Odea Bank.
The total net loan portfolio for entities operating outside Lebanon increased by USD 43 million during 2024. The portfolio stood at USD 864 million at end of December 2024, compared to USD 821 million at the end of December 2023.This increase was driven by a USD 56 million rise in Banque Audi (Suisse) and a USD 2 million increase in Bank Audi Qatar, partially offset by a USD 15 million decrease in Bank Audi France.
This geographical distribution of net loans and advances for entities operating outside Lebanon has experienced a notable shift between end-December 2023 and end-December 2024. Banque Audi (Suisse) saw an increase in its share from 45% to 49%, reinforcing its position as the largest contributor. Meanwhile Bank Audi France experienced a slight decline from 44% to 40%, while Bank Audi Qatar maintained a stable share of 11%.
As of end-December 2024, the Bank’s net loans for entities operating outside Lebanon exhibited the following distribution by borrower type:
Personal and Private Banking accounts for 59% of the loan portfolio mainly due to Banque Audi (Suisse), marking a slight decrease from 62% at end-December 2023.
Corporate Segment: represents now 39% of the consolidated net loan book, up from 36% at the end of December 2023, while the share of SME loans remains the same as of December 2023 and is equal to 2%.
The predominance of loans to Personal and Private Banking reflects the Bank’s effort to capture growth opportunities in the private and retail markets across countries of presence. At the same time, the significant share of corporate loans underscores the Bank’s longstanding relationships and established presence in the Corporate Sector.
Breakdown of Net Loans & Advances by Entities Operating Outside Lebanon as at end – December 2023 Breakdown of Net Loans & Advances in Entities Operating outside Lebanon by Type of Customer
(USD Million)
(USD Million)
293
333
19
20
SME
Corporate clients
Individuals, Sole Proprietorships
and Private Banking
509 510
11%
2023
45%Bank Audi SuisseBank Audi FranceBank Audi Qatar
Breakdown of Net Loans & Advances by Entities Operating Outside Lebanon as at end – December 2024
(USD Million)
11%2024
49%
Dec-23
Dec-24Bank Audi SuisseBank Audi FranceBank Audi Qatar
ANALYSIS OF LOANS BY ECONOMIC SECTOR
As of end-December 2024, the distribution of the Bank’s net loan
portfolio for entities operating outside Lebanon by economic sector
The increase of the net loan book by USD 43 million is mostly
attributed to the Private banking segment increasing by
As of end-December 2024, the composition of the Bank’s consolidated net loan portfolio by currency remained heavily concentrated in USD and EUR, which together accounted for 78% of total net loans for entities operating outside Lebanon.
currency with a 45% share, reflecting the Bank’s reliance on this stable currency amid the prevailing regional volatility, while the EUR (Euro) maintains a solid 33% share, serving as a key currency for transactions in European markets.
is led by a 51% share of Private Banking customers in the loan portfolio of these entities, followed by a 14% share of Wholesale Trade and a 10% share of Developers & Real Estate Services.
USD 66 million to be followed by an increase in the Wholesale Trade segment by USD 46 million with the remainder representing decrease by other loans.
The distribution of loans by currency as at end-December 2024, compared to end-December 2023, highlights significant stability within the portfolio as the USD (US Dollar) remains the predominant
The following charts show the distribution of the Bank’s consolidated net loan portfolio by currency as at end-December 2024 as compared to end-December 2023:
Breakdown of Net Loans & Advances in Entities Operating outside Lebanon by Economic Sector
Dec-24
Private Banking
372
45%
438
51%
Developers & Real Estate Services
87
11%
84
10%
Non-Bank Holdings & Financial Entities
86
10%
51
6%
Wholesale Trade
75
9%
121
14%
Manufacturing Industries
53
6%
42
5%
Other loans
148
19%
128
14%
Total
821
100%
864
100%
(USD Million) Volume Share in % Volume Share in %
Breakdown of Net Loans & Advances in Entities Operating Outside Lebanon by Currency Entities as at end – December 2023
2023
46%
15%
USDEUROther
Breakdown of Net Loans & Advances in Entities Operating Outside Lebanon by Currency Entities as at end – December 2024
2024
45%
22%
USDEUROther
ANALYSIS OF LOANS BY MATURITY
As at end-December 2024, the evolution of the loan portfolio for entities operating outside Lebanon shows an increase in short-term loans by USD 89 million. This increase is primarily attributed to Banque Audi (Suisse) and Bank Audi France, which contributed USD 56 million and USD 27 million, respectively, to the total short-term increase. Additionally, there was an increase in medium-term facilities of USD 10 million. Conversely, long term facilities experienced a decrease of USD 56 million, mainly due to
The structure of this net portfolio across maturities changed with an increase in the share of short term loans in the total to stand at 76% as at end-December 2024 compared to a share of 70% as at end-December 2023 amid a decrease of long term facilities in total net loans by around 8%.
LOAN QUALITY*
Entities Operating outside Lebanon
The Bank applies the IFRS9 standard in estimating collective and specific provisions for the loan portfolio.
The following table shows the main loan quality indicators as at end-December 2024 as compared to end-December 2023 for entities
operating outside Lebanon:
Loan Quality – Entities operating outside Lebanon (Excluding Odea Bank)
Change
the settlement of loans at Bank Audi France.
(USD Million) Dec-23 Dec-24
Dec-24/Dec-23
Credit impaired loans
31
28
-3
Net Loans
821
864
43
Allowance for ECL stage 3
26
25
-1
Allowance for ECL stage1 & 2
12
6
-6
Credit-impaired loans/Gross loans
3.6%
3.2%
-0.4%
Net credit-impaired loans/Gross loans
0.5%
0.4%
-0.1%
Credit-impaired loans coverage
85.5%
88.9%
3.4%
Allowance for ECL Stages 1 & 2/Net loans
1.4%
0.7%
-0.7%
The following table shows the breakdown of the loan portfolio of entities operating outside Lebanon by maturity as at end-December
2024 compared to end-December 2023.
Breakdown of Net Loans & Advances in Entities Operating outside Lebanon by Maturity since Inception
Dec-24
Short-term facilities
Medium-term facilities
Long-term facilities
571
48
202
69%
6%
25%
660
58
146
76%
7%
17%
Total
821
100%
864
100%
(USD Million) Volume Share in % Volume Share in %
(*)As per IFRS 9.
FUNDING SOURCES
ANALYSIS OF LOANS BY TYPE OF COLLATERAL
As of end-December 2024, the distribution of the consolidated net loan portfolio for entities operating outside Lebanon highlights the reliance on various forms of collateral. 63% of the net loan portfolio was secured, indicating a strong emphasis on collateralization, which enhances credit risk management. 18% of the net loan
portfolio is secured by corporate or personal guarantees while the remaining 20% share is unsecured. This distribution is mostly unchanged relative to end-December 2023, with shares of 65%, 18% and 18% respectively.
Funding sources of Bank Audi sal continue to be predominantly driven by private customers’ deposits. As at end-December 2024, consolidated deposits represented 74.5% of total funding sources, with the structural shift relative to 69.0% as at end-December 2023 reflecting predominantly the FX impact following the adoption of the new official exchange rate in 2024. This was partially compensated
by a decrease in the share of shareholders’ equity in total funding to 5.7% as at end-December 2024 from 9.3% as at end-December 2023, while Central Banks’ with Banks’ deposits, other liabilities and subordinated debt had shares in total funding of 1.8%, 16.4% and 1.5% this year, compared to 1.9%, 18.3% and 1.5% respectively the previous year.
The following table shows the distribution of the Bank’s loan portfolio by type of collateral as at end-December 2024 as compared to end-December 2023:
Central Banks’ deposits
169
32
-137
-81%
Dec-23
Dec-24
Time deposit
169
32
-137
-81%
(USD Million)
Volume
Share in %
Volume Share in %
Banks’ deposits
188
263
75
40%
Secured
530
65%
541
63%
Sight deposits
68
146
78
114%
Cash co. & bank guarantee
141
17%
157
18%
Time deposits
120
117
-3
-3%
Real estate mortgage
121
15%
109
13%
Customers’ and related parties’ deposits
12,806
12,416
-390
-3%
Securities (bonds & shares)
268
33%
275
32%
Sight deposits
7,645
7,579
-66
-1%
Corporate or personal guarantees
144
17%
152
17%
Time deposits, saving accounts and certificates of deposit
5,103
4,689
-414
-8%
Unsecured
147
18%
171
20%
Collateral and margins
58
148
90
155%
Total
821
100%
864
100%
Subordinated loans
271
268
-3
-1%
Other liabilities
3,394
2,731
-663
-20%
Shareholders’ equity
1,738
955
-783
-45%
Total
18,566
16,665
-1,901
-10.2%
Breakdown of Net Loans & Advances in Entities Operating outside Lebanon by Collaterals
The following table sets out the distribution of the Bank’s sources of funding as at the dates indicated:
Breakdown of Funding Sources
(USD Million) Dec-23 Dec-24
Change in Volume
Change in
%
CHANGES IN CUSTOMERS’ DEPOSITS
Consolidated deposits fell from USD 12.8 billion at end-December 2023 to USD 12.4 billion as at end-December 2024, corresponding to a decrease of USD 390 million. Most of this reduction was due to the FX effect following the adoption of the new official exchange rate early 2024.
Lebanese entities accounted for USD 468 million of the contraction in consolidated deposits, with the devaluation of the LBP driving a decrease in deposits denominated in LBP by USD 325 million. Deposits in foreign currencies of Lebanese entities decreased by USD 143 million. Deposits from entities operating abroad increased by USD 79 million, reflecting increases of deposits in Banque Audi
(Suisse) by USD 66 million and Bank Audi France by USD 34 million, amid decreasing deposit base in Bank Audi (Qatar) by USD 21 million. As at end-December 2024, the USD 12.4 billion of consolidated customers’ deposits were distributed across the Group’s entities as follows: Deposits of Lebanese entities totaled USD 10.4 billion, comprising USD 67 million in LBP and USD 10.3 billion in foreign currencies (including USD 9.7 billion in restricted deposits). Deposits of Private Banking entities led by Banque Audi (Suisse) totaled USD 837 million, while those of Bank Audi France and Bank Audi LLC (Qatar) reached USD 1.1 billion and USD 54 million respectively.
Conversely, as at end-December 2023, consolidated customers’ deposits totaled 12.8 billion. Deposits of Lebanese entities totaled USD 10.9 billion, comprising USD 392 million in LBP and USD 10.5 billion in foreign currencies (including USD 10 billion in restricted deposits). Deposits of Private Banking entities led by Banque Audi (Suisse) totaled USD 771 million, while those of Bank Audi France and Bank Audi LLC (Qatar) reached USD 1.1 billion and USD 74 million respectively.
ANALYSIS OF CUSTOMERS’ DEPOSITS BY MATURITY
The following table sets out the maturity profile of the Bank’s consolidated customers’ deposits as at end-December 2024 and as at end-December 2023:
Breakdown of Deposits by Maturity
Dec-23
(USD Million) Volume Share in % Volume Share in % Volume Share in %
Less than 1 month
11,607
90.6%
11,449
92.2%
-158
1.6%
1-3 months
632
4.9%
522
4.2%
-110
-0.7%
3-12 months
493
3.9%
411
3.3%
-82
-0.5%
Less than 1 year
12,732
99.4%
12,382
99.7%
-350
0.3%
1-5 years
58
0.4%
14
0.1%
-44
-0.3%
Over 5 years
16
0.2%
20
0.2%
4
0.1%
More than 1 year
74
0.6%
34
0.3%
-40
-0.3%
Total
12,806
100%
12,416
100.0%
-390
ANALYSIS OF CUSTOMERS’ DEPOSITS BY BUSINESS SEGMENT
The following table sets out the breakdown of consolidated customers’ deposits over business segments as at end-December 2024 as compared to end-December 2023:
Breakdown of Customers’ Deposits by Segment
Dec-23
(USD Million) Volume Share in % Volume Share in % Volume Share in %
Deposits from customers and related parties
12,806
100.0%
12,416
100.0%
-390
Corporate & SME Banking
1,300
10.1%
1,218
9.8%
-82
-0.3%
Retail, Personal & Public Banking
11,506
89.9%
11,198
90.2%
-308
0.3%
In 2024, the proportion of customers’ deposits with maturities of less than one month within consolidated deposits rose by 1.6%, increasing from 90.6% at the end of December 2023 to 92.2% at the end of December 2024. This shift reflects a predominance of sight deposits and a customer preference in entities operating outside Lebanon for placing savings in one-month deposits to capitalize on higher interest rates. The larger share of sight deposits in total
stickiness of deposits given that since October 2019, informal capital controls have been in effect in Lebanon, significantly restricting both outbound and inbound deposit flows.
As of December 31, 2024, 99.7% of consolidated customer deposits had maturities of less than one year, up from 99.4% at the end of December 2023. The remaining 0.3% primarily consisted of deposits
In 2024, the decrease of consolidated customers’ deposits excluding Odea Bank is skewed in absolute terms towards Retail & Personal Banking deposits. The latter decreased by USD 308 million during the year, from USD 11.5 billion as at end-December 2023 to
deposits in relative terms than that achieved by Corporate & SME Banking deposits.
The latter indeed contracted during 2024 by USD 82 million to stand
deposits particularly in Lebanese entities has no impact on the
ANALYSIS OF CUSTOMERS’ DEPOSITS BY CURRENCY
with maturities between one and five years.
USD 11.2 billion as at end-December 2024. Nonetheless, the share of those deposits in total consolidated customers’ deposits increased slightly from 89.9% as at end-December 2023 to 90.2% as at end-December 2024, following a slower contraction of consolidated
Lebanese Pound
392
3.1%
67
0.5%
-325
-2.6%
US Dollars
11,030
86.1%
10,922
88.0%
-108
1.9%
Euro
1,142
8.9%
1,146
9.2%
4
0.3%
Other currencies
242
1.9%
281
2.3%
39
0.4%
Total
12,806
100%
12,416
100.0%
-390
ANALYSIS OF CUSTOMERS’ DEPOSITS BY TYPE
at USD 1.2 billion as at end-December 2024 compared to USD 1.3 billion a year before. Consequently, the share of Corporate & SME Banking in total consolidated deposits decreased from 10.1% as at end-December 2023 to 9.8% as at end-December 2024.
The following table sets out the distribution of the Bank’s customers’ deposits by currency as at end-December 2024 as compared to end-December 2023:
Breakdown of Deposits by Currency
Dec-23
The following chart sets out the Bank’s consolidated customers’ deposits by type as at end-December 2024 and as at end-December 2023:
Breakdown of Customers’ Deposits by Type
Dec-23
(USD Million) Volume Share in % Volume Share in % Volume Share in %
(USD Million) Volume Share in % Volume Share in % Volume Share in %
Deposits from customers and related parties
12,806
100.0%
12,416
100.0%
-390
Sight deposits
7,645
59.7%
7,579
61.0%
-66
1.3%
Time deposits
5,103
39.8%
4,689
37.8%
-414
-2.0%
Margin deposits
42
0.3%
137
1.1%
95
0.8%
Others deposits
16
0.2%
11
0.1%
-5
-0.1%
Following the implementation of a new official exchange rate in Lebanon early 2024, the proportion of customers’ deposits in Lebanese Pounds (LBP) fell significantly from 3.1% as at end-December 2023 to just 0.5% as at end-December 2024. During the same period, the percentage of customer deposits held in
US Dollars increased from 86.1% to 88.0%, solidifying its status as the dominant currency in consolidated deposits. The share of deposits in Euros saw a slight increase, reaching 9.2% of total deposits, while the share of other currencies increased from 1.9% to 2.3%.
In 2024, the decrease in consolidated customers’ deposits excluding Odea Bank by USD 390 million reflects predominantly a decrease in sight deposits (including margin and other deposits) by USD 24 million to be added to a decrease in time deposits (including saving accounts and certificates of deposit) by USD 414 million.
Notwithstanding, sight deposits continue to account for the majority of total deposits as at end-December 2024 with a share of 62.2%, up from 60.2% as at end-December 2023. Consolidated sight and
other short-term deposits excluding Odea Bank stood at USD 7.73 billion as at end-December 2024, compared to USD 7.7 billion as at end-December 2023.
On the other hand, time deposits stood at USD 4.7 billion as at end-December 2024, compared to USD 5.1 billion as at end-December 2023, representing 37.8% of total deposits as at end-December 2024 compared to 39.8% as at end-December 2023.
SUBORDINATED DEBT
As at end-December 2024, post deconsolidation of Odea Bank, the Bank continued to have two unsecured subordinated loans of an aggregate amount of USD 268 million (including interest accruals),
material leading to a need for recapitalisation, and hence the unavailability of distributable free profits, interest payments under this agreement have been deferred. This matter was under
The chart below highlights the evolution of consolidated in 2024, split over the most significant components:
Evolution of Shareholders’ Equity in 2024
(LBP Billion)
compared to an aggregate amount of USD 271 million as at end-December 2023. Below is a detailed description of those loans:
USD 150 Million Due 11 April 2024 – 6.55% tele rate 6-month On 27 March 2014, the Bank entered into subordinated loans with the IFC and the IFC Capitalisation Fund in an aggregate amount of USD 150 million. The repayment date for the loans is 11 April 2024, subject to early redemption or acceleration (which is, in turn, subject to Central Bank approval). The loans bear interest at a rate of 6.55% over six-month LIBOR and certain fees, payable, in each case, on a bi-annual basis, subject to the availability of distributable free profits in accordance with the Central Bank’s
objection from the lender.
On April 4, 2024, the IFC’s Subordinated Loan matured. Bank Audi did not settled it in abidance by the decision taken by the Central Council of the BdL asking Bank Audi to suspend payment on the IFC Subordinated loan until such time when a banking restructuring law is issued. On 16 April 2025, upon a confidential agreement entered into by Bank Audi and the IFC parties, the objection and claim made by the IFC parties have been dismissed. As at 31 December 2024, deferred interest payable amounted to USD 60.7 million and was recorded under « Other liabilities ».
26,077 2
48,119
8,437
2,816
85,450
Basic Circular 35, as applicable at the time of entry into the loans. As per the agreement terms, if on a particular interest payment date, the Group does not determine it had free profits available for distribution based on the most recent audited financial statements, the Group’s obligation to pay such interest shall be deferred and
USD 116,560,000 Due 19 April 2027 – 5%
In September 2013, the Bank issued USD 350 million of subordinated unsecured bonds. The repayment date for the bonds was 16 October 2023, subject to early redemption or acceleration. Earlier in 2022, the Bank proceeded to the conversion earlier of
Dec-23
Net profit for the year 2024
FCTR
Dec-24/23
Others Minority share
Dec-24
become due and payable on the next interest payment date, to the extent of free profits then available, and if not then available, such deferral shall continue until the interest payment date when all interests have been paid in full.
In light of the severity of the Crisis in Lebanon, the prevailing uncertainties and its effect on the Group’s financial position retaining earnings and equity which the Group anticipates to be
SHAREHOLDERS’ EQUITY
In 2024, Bank Audi’s consolidated shareholders’ equity, expressed in USD at the prevailing official exchange rates, decreased by USD 783 million, dropping from USD 1.7 billion as at end-December 2023 to USD 955 million as at end-December 2024. This decline is mainly attributed to the devaluation of the LBP against the USD, particularly following the adoption of the new official exchange rate in early 2024, from LBP 15,000 per USD in 2023 to LBP 89,500 per USD. The negative impact is further magnified by the non-monetary nature of shareholders’ equity, as its value in LBP remains unchanged despite the currency’s devaluation. In LBP, consolidated shareholders’ equity increased from LBP 26,077 billion as at
the USD 347 million subordinated debt maturing in 2023 into new unsecured subordinated notes under Lebanese law, the 2022 subordinated notes, that includes a put option at the discretion of the noteholder who may choose to redeem the note at 90.5% of the principal amount. As at 19 May 2022, holders of notes representing approximately USD 230 million had exercised the put option out of USD 347 million outstanding (66% of the total).
end-December 2023 to LBP 85,450 billion as at end-December 2024, representing a rise by 228%.
This significant evolution is justified predominantly by a significant impact of the devaluation of the Lebanese pounds on:
consolidated equity given its non-monetary, and,
on fixed assets following the deletion of the artificial inflation of the value of Lands and Building created as at end-December 2023 as a result of the adoption then of a rate of LBP 89,500 for their revaluation at a time where the applied official reporting rate was LBP 15,000.
In details, the above movement of consolidated equity was driven by:
A sizeable positive FX translation impact on the Bank’s investments denominated in FCY and translated to LBP as result of change in the official rates. This was partially offset by a negative FCTR in FCY as result of the devaluation of the CHF and TRY against the USD dollar,
The revaluation of Lands and Buildings as per the Central Bank of Lebanon’s request from USD 194 million to USD 205 million,
A mark-to market loss related to the revaluation of Financial instruments booked as OCI.
In terms of equity structure as at end-December 2024, total shareholders’ equity comprised LBP 1,885 billion of common equity group share, in addition to LBP 905 billion of preferred equity
and LBP 3,342 billion of minority shares. The Bank’s common share capital amounted to LBP 983 billion. The said share capital represented 588,538,215 common shares (BSE: AUDI) as at end-December 2023 and 2024, each with a nominal value of LBP 1,670 of which 119,639,761 were represented by Global Depositary Receipts listed on the Beirut Stock Exchange ( BSE: AUSR).
The preferred equity represents 3 series as follows: Series « H » comprising 750,000 shares, Series « I » comprising 2,500,000 shares, and Series « J » comprising 2,750,000 shares, all with an issue price of USD 100. The terms of Series « I » and « J » preferred shares include a loss absorption clause whereby a trigger event (capital adequacy or non-viability event) could result in the mandatory conversion of those preferred shares to common shares at a ratio of 15 common shares for each preferred shares.
CAPITAL ADEQUACY
The following table sets out the Bank’s capital adequacy ratios as at end-December 2024 and end-December 2023:
Capital Adequacy Ratio
Change
The accumulated provisions for risk and charges are to be added to other exceptional expenses incurred since the outset of the Lebanese Crisis in October 2019 and which are closely tied to the
adopted six going concern pillars. Together they aggregate to the one-off flows.
(USD Million) Dec-23 Dec-24
Dec 24/23
The chart below displays a breakdown of the one-offs expenses incurred by the Bank over the 2020-2024 period broken down over the respective going concern pillars:
Risk-weighted assets
16,337
14,568
-1,769
o.w. Credit risk
15,369
12,893
-2,476
o.w. Market risk
501
618
117
o.w. Operational risk
467
1,057
590
Tier 1 capital
1,439
819
-620
o.w. Common Tier 1
1,379
809
-570
Tier 2 capital
119
263
144
Total regulatory capital
1,558
1,082
-476
Breakdown of One-Offs Expenses over Selected Components of the Six Going-Concern Pillars
Common Tier 1 ratio
+ Additional Tier 1 ratio
= Tier 1 ratio
8.44%
0.36%
8.80%
5.55%
0.07%
5.62%
-2.89%
-0.29%
-3.18%
Tier 2 ratio
0.73%
1.81%
1.08%
Total ratio
9.54%
7.43%
-2.11%
Minimum capital requirements(*)
(USD Million)
810
631
346
166
210
251
137
145
86 95 89
-100 -35
-250
-67
-4
-14
-64
2020
2021
2022
2023
2024
925
Common Tier 1 ratio
+ Additional Tier 1 ratio
= Tier 1 ratio
Tier 2 ratio
4.50%
1.50%
6.00%
2.00%
4.50%
1.50%
6.00%
2.00%
Total capital ratio 8.00% 8.00%
(*)BdL allowed Banks to draw down on the capital conservation buffer in 2020-2021 and requested from them to rebuild it progressively. For 2023 and 2024, the forbearance treatment was reinstated waiving the CCB temporarily.
P1: Assets quality
P3-1: Liquidity
P3-2: ALM
P5: Op. risk & non-financial
Alongside the decline in consolidated shareholders’ equity in 2024, regulatory capital also reduced by USD 476 million, decreasing
6.0%, and 8%, respectively, excluding the capital conservation buffer of 2.5% which requirement was waived by the Central Bank
*During 2020, USD 195 million represents gain from PV LBP structure on CDs sold to CLDs .
** During 2020, USD -95 million represents loss on BdL deposits breakage for FX purchase.
from USD 1.6 billion as at end-December 2023 to USD 1.1 billion as at end-December 2024, a contraction by 30.5%. The change in the official exchange rate also adversely affected consolidated risk-weighted assets, albeit to a less extent, since the latter dropped from USD 16.3 billion as at end-December 2023 to USD 14.6 billion as at end-December 2024, reflecting a 10.8% decrease.
of Lebanon for the years 2023 and 2024.
On 14 October 2024, the Bank and other shareholders entered in to definitive agreement with ADQ for the sale of their stake in Odea Bank AS. The completion of this transaction, and the subsequent deconsolidation of Odea Bank from the Group, would have a beneficial impact on the Common Tier 1 equity of Bank Audi,
The table below sets out the evolution of the Bank’s net normalised consolidated results in 2024 relative to 2023, while showcasing one-off flows tied to the Crisis and the results of discontinued
Summarised Normalised Consolidated Income Statement
operations across both dates. Results of discontinued operations refers to the results of Odea Bank, the Bank’s subsidiary in Turkiye.
Change YOY 2024/2023
Due to a faster decline in the components of regulatory capital than in consolidated risk weighted assets, the total capital adequacy ratio of the Bank reduced during the year. As at end-December 2024, both the consolidated CET1 and Tier one ratios stood at 5.6%, while the consolidated capital adequacy ratio stood at 7.4%. These figures are compared to the regulatory minimums of 4.5%,
mainly driven by the release of its risk-weighted assets, amounting to USD 1.9 billion. A simulation based on reviewed consolidated figures as at end-December 2024 reveals that the deconsolidation of Odea Bank would translate into a corollary improvement in Bank Audi’s CET1 and Tier 1 ratios from 5.9% to 6.0%. In parallel, total capital ratio would stand at 7.2%.
(USD Million) 2023 2024
in Volume in %
RESULTS OF OPERATIONS
Bank Audi reported zero consolidated net profits in 2024, same as in 2023, in line with the declared direction to earmark all pre-prov pretax profits to provisions for risk and charges. The Bank resolved to allocate these provisions where and when needed to any asset class until such time a resolution plan is implemented. The relevant regulatory authorities fully supported this direction and authorized the Bank to incorporate partially those provisions along the Stage 1 ECLs as Tier 2 capital components.
Up to end December 2024, the outstanding balance of provisions for risk and charges in Bank Audi Lebanon reached USD 384 million, of which USD 252 million accumulated during the 2024 exercise. By currency, the USD 384 million are broken down over USD 158 million denominated in LBP and USD 226 million denominated in foreign currencies.
Interest income(1)
Net of new taxes on financial investments
Non-interest income
406
-28
145
236
-6
131
-170
22
-14
-41.9%
-78.6%
-9.7%
Total income
551
367
-184
-33.4%
Operating expenses
287
165
-122
-42.5%
Credit expense
14
-3
-17
-121.4%
Income tax
15
23
8
53.3%
Total expenses
317
185
-132
-41.6%
Net profits after tax (Normalised from continuing operations)
234
183
-51
-21.8%
Results of discontinued operations
71
-10
-81
-114.0%
Net profits after discontinued operations
306
173
-133
-43.5%
+ Crisis-related one-offs
-306
-173
134
-43.8%
= Net profit after tax and one-offs
0
0
0
0%
* Restated excluding Odea Bank for comparative purposes
(1)Includes interest revenues from financial assets at FVTPL.
In 2024, Bank Audi’s normalized net profits after tax, before one-off flows and the results of discontinued operations, contracted by 21.8% to USD 183 million from USD 234 million in 2023.
By geography, the USD 51 million year-on-year contraction in net profits is attributed principally to Lebanese entities that registered a decline in net profits over the period by USD 57.8 million while net profits of entities operating abroad expanded by USD 6.3 million. In fact, in 2024, Lebanese entities reported normalized net profits after tax, before one-off flows and the results of discontinued operation of USD 138 million compared to USD 196 million in 2023, representing a decrease by 29.5%. This evolution is justified by a lower total income generation by USD 189 million following
- the depletion of net income sources (in LBP mostly but also in USD) given the comprehensive de-risking of the loan portfolio in Lebanon within a significant no reliance on income generated from the BdL or sovereign placement and 2) the devaluation of the LBP versus the USD following the adoption of the new Official exchange
rates by Banque du Liban in February 2024. It was partially offset by a contraction of general operating expenses of Lebanese entities by USD 135 million during the year from USD 209 million in 2023 to USD 73 million in 2024.
In parallel, entities operating outside Lebanon registered net normalized profits of USD 44 million in 2024 compared to USD 37.8 million, representing an increase by USD 6.3 million or 16.7%. By entity, the USD 44 million are broken down over USD 21.4 million for Private Banking entities, USD 17.4 million for Bank Audi France, and USD 5.3 million for Bank Audi Qatar. This is compared to a contribution of USD 21.3 million for Private Banking entities, USD 13.4 million for Bank Audi France and USD 3.1 million for Bank Audi Qatar in 2023.
In what follows, we analyse the line-by-line flows of normalised profits in 2024 relative to 2023.
In contrast, entities operating outside Lebanon experienced an increase in general operating expenses, rising from USD 79 million in 2023 to USD 91 million in 2024. This uptick reflects the prevailing inflationary pressures in those countries.
To align operating costs with current business activities, Bank Audi Lebanon’s management continues to enforce a rigorous cost control policy. This includes a freeze on recruitment, except for critical needs, and rightsizing the branch network and human
INCOME TAX
Consolidated income taxes from normalised continuing operations moved from USD 15 million in 2023 to USD 23 million in 2024,
RESULTS FROM DISCONTINUED OPERATIONS
capital. A key initiative is the launch of a neo-bank, aiming to build a digital bank without physical branches. This transition involved replacing branches with digital outlets, leading to a reduction in staff. In 2024, BASAL’s staff decreased by 173 employees, from 1,302 full-time employees (FTEs) as at end-December 2023 to 1,129 FTEs as at end-December 2024. Additionally, three physical branches were closed in tandem with the rollout of the neo-bank, in alignment with the bank’s strategic shift towards digital banking.
of which USD 10.3 million are contributed by entities operating outside Lebanon.
INTEREST INCOME
In 2024, consolidated net interest income net of taxes decreased by USD 170 million, driven by Lebanese entities with consolidated interest income moving from USD 406 million in 2023 to USD 236 million in 2024. The latter decrease is driven by the effect of devaluation of the LBP versus the US Dollar coupled with regulatory interest rates cuts on placements with the Central Bank of Lebanon denominated in foreign currencies, along with the continued effect of the deleveraging of the loan portfolio. The contribution of Lebanese
entities to consolidated net interest income amounted to USD 154 million in 2024 while that of entities operating outside Lebanon reached USD 82 million, almost the same level as in 2023.
The contraction in consolidated net interest income resulted in a drop in consolidated net spread, from 2.12% in 2023 to 1.40% in 2024, mirroring a sharp decrease in the spread of Lebanese entities from 2.28% in 2023 to 1.15% in 2024.
In 2023, due to Odea Bank’s significant capital needs to sustain growth amid the ongoing devaluation of the Turkish Lira, the Board of Directors of Bank Audi sal decided to divest its investment in the Turkish subsidiary. Up until the completion of the transaction on 26 March 2025, Odea Bank’s operations were classified as a discontinued operation in accordance with IFRS. As a result, its financials were not included in the Income Statement on a line-by-line basis. Instead, the net profits from this discontinued
COMPONENTS OF ROAA AND ROAE
operation in 2023 and in 2024 were reported under « results from
discontinued operations.
Results from discontinued operations, or the contribution of Odea Bank to the consolidated net profits, reached USD 71 million in 2023. In 2024, said contribution turned negative with a net loss of USD 10 million.
NON-INTEREST INCOME
In parallel, normalised consolidated non-interest income contracted by 9.7% or USD 14 million, decreasing from USD 145 million in 2023 to USD 131 million in 2024. By geography, normalized non-interest income of Lebanese entities decreased from USD
89.3 million to USD 70.1 million, declining by USD 19.2 million.
This decline stems from a drop in the net commission generation
of Lebanese entities from USD 82.7 million in 2023 to USD 62.9 million in 2024, reflecting the very limited transactional activity as well as the devaluation of the Official exchange rate. In parallel, non-interest income generation in entities abroad expanded from USD 55.8 million in 2023 to USD 61 million in 2024.
The Bank’s profitability ratios in 2024 continued to be distorted by the magnitude of the one-off flows. The analysis at consolidated level, excluding the one-off flows and discontinued operations, reveals that the return on average assets stood at 1.08% as at end-
2023
2024
Change
Spread
2.12%
1.40%
-0.72%
Key Performance Metrics(*)
December 2024 compared to 1.22% as at end-December 2023. The table below sets the evolution of key performance indicators in 2023:
COST OF CREDIT
In 2024, in consideration of the significant reduction of the loan portfolio of Lebanese entities reaching in net terms a mere USD 129 million compared to end-December 2024 within a coverage of credit impaired loans of those entities increasing to 79.1%, Management did not allocate any impairment cost in Lebanese entities. An allocation for specific provision was made in Bank Audi France for USD 5.2 million, offset by provisions
recoveries at Bank Audi France of USD 8.5 million, leaving a negative allocation on consolidated level of USD 2.7 million. This is compared to an allocation of USD 14.2 million in 2023, of which USD 12.5 million booked by Bank Audi France and USD 1.6 million in Bank Audi (Qatar), both representing the main booking entities for lending for the Group.
+ Non-interest income/AA 0.76%
= Asset utilisation 2.88%
X Net operating margin 42.50%
o.w. Cost to income 52.13%
o.w. Provisions 2.57%
o.w. Tax cost 2.79%
= ROAA 1.22%
X Leverage 11.63
= ROAE 14.22%
ROACE 15.86%
(*)Based on Normalized Consolidated Income Statement excluding one off flows & discontinued Operations.
0.77%
2.17%
49.69%
44.80%
-0.73%
6.24%
1.08%
16.84
18.17%
18.39%
0.01%
-0.71%
7.19%
-7.33%
-3.30%
3.45%
-0.14%
5.21
3.95%
2.53%
TOTAL OPERATING EXPENSES
EARNINGS PER COMMON SHARE AND COMMON BOOK PER SHARE
In 2024, the Bank’s consolidated normalized total operating expenses amounted to USD 165 million, a 42.5% decrease relative to USD 287 million in 2023. This reduction is primarily attributed
to the devaluation of the official exchange rate, which impacted Lebanese entities’ expenses. These expenses decreased from USD 209 million in 2023 to USD 73.3 million in 2024.
« Basic earnings per common share » is calculated based on the weighted number of common shares in issue over the period and net profits after tax. For comparison on equal basis, we exclude from the calculation net profits from discontinued operations, as well as the exceptional flows since 2019 onward. Normalized
basic earnings per share stood at USD 0.31 in 2024 compared to USD 0.42 in 2023. Taking into account the allocation of net profits generated in 2024 to provisions for risk and charges as stated in the published consolidated income statement, Bank Audi would report a zero basic earnings per share in 2023 and in 2024.
The chart below sets out the evolution of normalized basis earnings since 2020:
Normalized Earnings per Common Share Growth
(USD)
governance framework and could potentially pave the way for
implementing structural reforms necessary for sustainable recovery.
Throughout 2024, Bank Audi’s strategy in Lebanon focused on:
2. Continuing a prudent de-risking policy in line with local economic conditions, currency fluctuations, and the Bank’s conservative provisioning approach.
0.42
0.31
0.94
1.23 1.16
1. Providing essential support (e.g., financing facilities for working capital & capex, trade finance, foreign exchange and cash management) to help Corporate and Commercial Banking clients address financing needs and daily operational and financing needs.
Accordingly, total net loans to corporate and commercial clients
in Lebanon stood at USD 93 million as at end-December 2024 (compared to USD 194 million as at end-December 2023). This figure reflects the ongoing deleveraging trend and the Bank’s continued provisioning strategy aimed at preserving portfolio quality amid uncertain economic conditions.
2020
2021
2022
2023 2024
FOREIGN ENTITIES
Bank Audi France SA
The corporate and commercial net loan portfolio at Bank Audi
Turkish authorities, and the continued depreciation of the Turkish
Lira, which impacted the USD countervalue of the local currency-
The table below sets out the common book per share as at end-December 2024 as compared to end-December 2023:
Equity Metrics
Shareholders’ equity
1,738
955
-783
-45.0%
– Minority shares
49
37
-12
-24.0%
= Shareholders’ equity group share
1,689
917
-772
-45.7%
– Preferred stock (including dividends)
60
10
-50
-83.3%
= Common shareholders’ equity
1,629
907
-722
-44.3%
Weighted average of outstanding shares (net of Treasury stock)
587,366
587,366
0
0.0%
Common book per share (USD)
2.77
1.54
-1.23
-44.4%
Share price at end-December (USD)
2.35
2.48
0.13
5.5%
P/Common book
0.85
1.61
0.76
89.4%
(USD Million) Dec-23 Dec-24 Change Percent
France as at end-December 2024 amounted to USD 343 million, compared to USD 359 million as at end-December 2023. Bank Audi France continues to support the Group’s corporate clients in their international ventures, providing selective loans and credit facilities to projects and businesses that present balanced risk-return profiles.
Odea Bank SA – Turkey
As at end-December 2024, the corporate and commercial net loan portfolio of Odea Bank (expressed in US Dollars) stood at USD 752 million, compared to USD 1.07 billion as at end-December 2023. This evolution was influenced by ongoing settlement of foreign currency-denominated loans, policy rate adjustments by
denominated portfolio.
Despite the continued complexities in global and regional markets, Bank Audi’s Corporate and Commercial Banking remains committed to prudent risk management, active portfolio monitoring, and support for clients’ evolving needs. The Bank believes that the renewed political momentum in Lebanon, accompanied by broader structural reforms-particularly the restructuring of the banking sector-can set the stage for a more sustainable recovery. Bank Audi’s strategic focus thus remains on selective lending, optimal portfolio quality, and delivering value-added services to its corporate and commercial clients across its markets.
The common book per share decreased from USD 2.77 as at end-December 2023 to USD 1.54 as at end-December 2024, mirroring the registered contraction in common equity when
PRINCIPAL BUSINESS ACTIVITIES
COMMERCIAL AND CORPORATE BANKING
In 2024, global markets continued to experience heightened volatility and economic uncertainty, in large part due to ongoing geopolitical tensions and conflict in the broader region. The persistence of military confrontations, including the war in Ukraine and sporadic flare-ups in the Middle East, contributed to amplified concerns over global energy supplies, inflationary pressures, and investor sentiment. Moreover, shifting alliances and policy decisions in response to the conflicts kept market participants on edge. Against this backdrop, governments and central banks worldwide grappled with the twin challenges of containing inflation and supporting economic recovery, leading to frequent regulatory and policy adjustments.
LEBANESE OPERATIONS
In 2024, Lebanon’s economy continued to walk a tightrope between persistent structural challenges and fleeting signs of improvement. Deep-rooted fiscal imbalances, high public debt, and the urgent need for banking sector restructuring weighed on overall prospects. The situation was further aggravated in the third and fourth quarters of 2024 by the war in Lebanon, which disrupted tourism, trade, and private sector operations.
translated to USD (please refer to the section « Shareholders’ Equity » section for further details).
In this challenging environment, Bank Audi maintained a proactive and prudent approach to navigate market volatility across its operating markets and to address rapidly changing regulatory frameworks. The Bank’s overarching objective has remained twofold: to support clients’ business continuity and growth while preserving adequate portfolio quality.
During 2024, and building on its ongoing de-risking strategy, Bank Audi’s net consolidated lending by Corporate and Commercial Banking stood at USD 0.95 billion as at end-December 2024 (compared to USD 1.02 billion as at end-December 2023). The change reflects continued deleveraging efforts in Lebanon and the impact of currency fluctuations in some markets of operation.
Despite these setbacks, the Lebanese private sector again showcased its resilience. A moderate rebound in trade gave some businesses a lifeline, highlighting Lebanon’s enduring strategic importance in the region. By year- end, cautious optimism emerged, spurred by the prospect of electing a president and forming a cabinet-an outcome that materialized in January 2025. This political breakthrough is expected to provide a more stable
RETAIL BANKING
The evolving landscape of global banking has spurred banks to reassess their overall strategies, particularly within its Retail Banking Segment. In an era of digital disruption and changing consumer expectations, banks recognize that the key to sustainable success lies in offering personalized, affordable, convenient and seamless banking experiences. Banks worldwide are augmenting their digital capabilities to meet their evolving customer needs and adapt to shifting market dynamics. They are assessing their traditional business models and prioritizing digital transformation.
The Retail Banking segment has remained resilient despite
challenges, focusing on sustainable growth, non-interest income
BANK AUDI SAL – (LEBANON) (BASAL)
In response to evolving market dynamics, Bank Audi Lebanon has redefined its business model, transitioning towards a digital-first approach for individuals while maintaining a strong presence to cater for corporate and commercial activities. To align with its strategic positioning, the bank optimized its physical presence by reducing the number of brick-and-mortar branches from 83 in 2019 to 42 at the date of this report, focusing on serving corporate and commercial clients and continuing to satisfy the more complex needs of affluent & high net-worth customers.
The aforementioned transformation marks a significant shift from a branch-heavy model to a more accessible and tech-driven infrastructure, ensuring broader financial inclusion while maintaining efficiency and convenience. By encouraging its
expansion, and key client segments such as HNWIs, Affluent, upper affluent and mass customers. Efforts include enhancing client segmentation, personalizing banking experiences, and diversifying revenue through fee-based services wealth management, and tailored financial solutions.
Digital and transactional banking improvements aim to provide seamless, convenient solutions that align with customer aspirations, reinforcing loyalty and satisfaction. The Bank remains committed to innovation and excellence, ensuring its offerings evolve with market demands.
individual customers to switch to a digital-first experience, Bank Audi is embracing a future-ready approach, making financial services more seamless, cost-effective, and aligned with global banking trends.
In support of this strategy, the Bank expanded its alternative channels for individual clients and more specifically its ATM network by 32 ATMs in 2024, bringing the total to 221, while partnering with agents to extend cash points across Lebanon.
Retail credit and debit card activity In parallel, the retail credit and debit cards business has evolved in 2024 and demand for cards increased driven by the need for financial flexibility in a challenging economic environment as well as the improvement of financial
literacy among the Lebanese population specially among younger
consumers.
After it has completed the migration of its Cards’ Portfolio from Visa to Mastercard, Bank Audi currently offers a diverse range of credit and debit cards for local and International use tailored to meet various financial needs.
Furthermore, the Bank is currently working on enhancing its Reward & Loyalty Programs to provide value for cardholders, encouraging them to use their cards more frequently. The program is also intended to attract more customers.
Neo digital bank
2024 marks a transformational year for Bank Audi with the official launch of neo by Bank Audi, Lebanon’s first full-fledged digital bank. As the foundation of the bank’s long-term digital strategy, neo is designed to offer a seamless, cost-efficient, and fully digital banking experience, providing individuals, professionals, and businesses with innovative financial solutions.
Building on the strong foundation laid in 2023, neo successfully transitioned from development to full-scale execution in 2024. Launched in mid-year, neo has witnessed exceptional adoption within just six months, acquiring a large number of clients equally split between new-to-bank customers and existing Bank Audi clients. These include private-sector employees receiving their salaries through neo, public sector workers, and individuals using the platform for various financial needs, including cross-border remittances. By simplifying access to financial services, neo is not just growing its customer base but also actively reintegrating clients into the formal banking sector.
neo has played a crucial role in bringing clients back into the banking sector promoting digital payments over cash, contributing to a more structured and cashless ecosystem. By offering a reliable and efficient alternative to physical cash transactions, neo is helping shift payment habits in Lebanon towards digital solutions, supporting financial inclusion, and reducing the informal use of cash in everyday transactions.
At the core of neo’s success is a growing team of industry experts who drive the business forward. Our team includes industry experts across various domains, ensuring operational excellence, innovation, and customer-centric solutions. This includes our Compliance team, which ensures adherence to regulatory frameworks and upholds the highest standards of security and transparency. Additionally, our dedicated Contact Center provides seamless support via direct calls or chat, delivering an efficient and personalized banking experience. Together, these teams play a critical role in maintaining trust, operational efficiency, and continuous growth.
This expertise is complemented by a full standalone digital banking stack, built on state-of-the-art technology that supports scalability and continuous innovation. Designed for seamless integration with third-party services, the secure infrastructure allows for the addition of new functionalities and future expansion. This adaptability ensures that neo remains at the forefront of digital banking, offering customers a cutting-edge, digital-first experience that meets global standards and evolves with their needs.
As part of its commitment to innovation, neo App delivers a fully digital experience from start to finish without the need to visit the branch. Clients can onboard from anywhere get authenticated biometrically, open an account instantly, and access dual-currency (LBP & USD) transactions, debit and credit card services, seamless funding and payments, real-time currency exchange, bill payments, and instant salary advances. Further enhancing its remote-first approach, neo allows customers to request a debit card delivered via fast and secure mailing service, manage payments, and split bills effortlessly-all within the neo app. With the addition of lending services tailored for payroll clients, neo continues to enhance its financial ecosystem.
Expanding beyond individual banking, neo has introduced solutions catering to different customer segments. neo teens provides a dedicated platform for young users, empowering them to receive and send money, withdraw cash from ATMs, split and pay bills, and purchase e-vouchers under full parental supervision. Meanwhile, the bank is working on introducing neo business that will offer a streamlined banking experience for freelancers, professionals, and businesses, enabling efficient payment collection and bulk disbursement solutions.
By introducing neo, Bank Audi now offers a dual banking approach, giving clients the flexibility to choose between a fully digital bank or traditional branch-based services. This model provides customers with greater control over their banking experience, allowing them to transition to digital banking at their own pace while maintaining access to physical branches when needed.
As neo continues to scale, it is not just redefining banking in Lebanon-it is shaping the future of financial services. By combining innovation, accessibility, and operational efficiency, neo is driving the next phase of digital transformation, reinforcing its position as Lebanon’s fastest-growing digital bank and setting new benchmarks for modern banking in the region.
Odea Bank SA – Turkiye Odeabank’s Retail Banking Unit in Türkiye has been focused on offering personalized services and expanding its product portfolio to meet customer needs. In 2024, the bank’s primary goal was to strengthen long-term relationships with clients by providing a range of financial products tailored to their evolving requirements. This resulted in a 25% increase in the number of active customers.
The Bank continued to enhance its offerings to meet the diverse needs of customers across various risk profiles. Notably, the Retail Banking Unit introduced Privileged and Private Banking services to cater to high-net-worth individuals. These services provided exclusive benefits such as dedicated Relationship Managers, rich investment product alternatives, free money transfers, and discounted safe deposit boxes. These efforts aimed to offer tailored banking experiences that met both the financial and non-financial expectations of customers.
Odeabank was also a pioneer in remote banking services. Building on its 2015 launch of remote account opening, the bank integrated video calls into the process, facilitating easier customer acquisition. By 2024, approximately 75% of new customers were acquired through remote channels. This move was supported by a strong focus on digital marketing, with campaigns designed to increase
customer awareness and brand recognition. Collaborations with leading brands in Türkiye, along with investments in performance-based communication channels, further boosted Odeabank’s visibility and customer acquisition.
The Bank’s shift towards « phygital banking » continued, combining experienced financial consulting with digital services. By 2024, the number of active customers engaging with Odeabank’s digital services grew by 48%. The Bank also continued to focus on investment products, particularly through its digital channels. Campaigns promoting investment opportunities helped improve customer engagement, while Odeabank also launched initiatives to increase customer loyalty, such as the « Invite Your Friend » campaign.
Odeabank’s digital platforms, including its mobile app, saw significant growth. The mobile transaction volume surged by 179% compared to the previous year, and the app was downloaded over 430,000 times in 2024. The Bank’s ATMs, available across Türkiye, supported these digital efforts by providing customers with additional access points for banking transactions.
Akademi’O, Odeabank’s financial education platform, continued to offer valuable content, including audio bulletins and podcasts, to improve financial literacy. These resources provided insights into global markets and investment strategies, keeping customers informed and engaged.
In terms of retail banking products, Odeabank made significant improvements across several areas:
PRIVATE BANKING
Bank Audi Private Bank, which provides services to high-net-worth individuals through its network in Europe (Geneva) and the Middle East (Beirut, Riyadh, Abu Dhabi and Amman), comprises two main booking entities, namely Banque Audi (Suisse) SA and Audi Capital (KSA).
Bank Audi Private Bank offers a full and diversified range of services, with access to major markets worldwide and global investment products, including discretionary portfolio management, investment advisory and trade execution services in all asset classes, structuring and management of Saudi and regional funds, and other Private Banking services. Its main customers are high net worth individuals in Lebanon, Europe and the Gulf region, as well as the Lebanese diaspora in Sub-Saharan Africa and Latin America.
Bank Audi Private Bank entities have consolidated on balance sheet assets and assets under management (comprising of assets under
TREASURY AND CAPITAL MARKETS
The year 2024 saw a net improvement in Lebanon’s capital markets within the context of the stability in the Lebanese Pound (despite the war spillovers) and a surge in equity and bond markets.
Investment Products: The Bank enhanced its customer-focused investment management approach by offering tailored products and expert guidance. For instance, the stock trading experience was improved through updates to the Odea application, offering features such as a daily bulletin and economic calendar. Additionally, mutual fund volumes grew by 112%, reaching TL 56.5 billion by the end of 2024.
Deposit Products: Odeabank offered fixed and variable income deposit products, including Oksijen accounts that provided overnight interest and flexibility in managing currency holdings. The demand for these products increased by 118% from the previous year. The Bank also introduced campaigns for new customers to boost deposit volumes.
Retail Loans: The introduction of pre-approved personal loans through the Odea app allowed customers to access credit limits easily, with or without credit life insurance. This digital loan application process simplified customer access to financial products.
Debit and Credit Cards: Odeabank launched contactless payment features for its debit cards and introduced Troy-branded credit cards to support domestic payment systems. The Bank also simplified the card application process and introduced new products targeting upper-segment customers.
Insurance and Private Pension: Odeabank expanded its offerings in the insurance and private pension sectors, collaborating with companies like AXA Sigorta and MetLife to provide customers with more accessible insurance and retirement products.
management, fiduciary deposits and custody accounts) reaching USD 5.9 billion at end-December 2024. In Switzerland, Banque Audi (Suisse) SA represents the main Private Banking arm of the Group, with over USD 5.2 billion in AuMs. In Saudi Arabia, Audi Capital (KSA) serves as the Group’s main Private Banking hub for GCC markets, with AuMs of USD 0.7 billion.
The Private Banking entities are well structured, with the same Senior Management team which will progressively ensure better synergy and accountability, effective management, corporate governance, and alignment of business objectives. The de-risking of its balance sheet by the sale of Audi Private Bank sal in 2020 has helped ensure that the Private Banking business is well poised for future growth outside Lebanon, particularly given the persisting challenging domestic and global economic conditions.
At the foreign exchange market level, the LBP held firm ground against the US dollar on the parallel FX market over the year 2024, registering marginal movements around 89,600-89,700 despite
AttachmentsOriginal documentPermalinkDisclaimer
Bank Audi SAL published this content on May 26, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 26, 2025 at 16:27 UTC.
Abu Dhabi Developmental Holding Company PJSC completed the acquisition of 96% stake in Odea Bank Anonim Sirketi from Bank Audi sal, International Finance Corporation, European Bank for Reconstruction and Development and Ifc Fig Investment Company S.A.R.L.
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DurationAuto.2 months3 months6 months9 months1 year2 years5 years10 yearsMax.PeriodDayWeek
AUDI: Dynamic Chart
Bank Audi SAL is a Lebanon-based banking institution. It operates under the following business segments: Corporate and Commercial Banking, Retail and Personal Banking, and Treasury and Capital Markets. The Corporate and Commercial Banking segment provides products and services to the corporate and commercial customers, including loans, deposits, trade finance and exchange of foreign currencies, among others. The Retail and Personal Banking segment provides individual customersâ deposits and consumer loans, overdrafts, credit cards, and funds transfer facilities, among others. The Treasury and Capital Markets segment provides treasury services including transactions in money and capital markets for the Groupâs customers, manages investment and trading transactions, and manages liquidity and market risks. The Treasury and Capital Markets segment also offers investment banking and brokerage services, and manages the Groupâs own portfolio of financial instruments.
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