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LFB to boost HSBC unit stake to 70pc

Tripoli, May 26, 2009

The Libyan Foreign Bank (LFB) aims to hike its stake in HSBC affiliate British Arab Commercial Bank to 70 from 25 per cent and plans to raise its capital 10 times to $10 billion, the Oea daily reported on Tuesday.

State-owned LFB has held a 0.56 percent stake in Italy's second-largest bank UniCredit since 1997 and bought another 3.67 per cent together with the Libyan Investment Authority sovereign wealth fund last October.

'The planned capital increase to $10 billion is part of a long-term strategy. The (LFB) General Assembly would meet in mid-June on that. Libya Central Bank has the last word as it owns the bank,' Oea quoted LFB bank chairman Mohamed Bait-Elmal as saying.

'LFB eyes the increase of its stakes in 35 acquisitions across the world. The bank will hike its share in the British Arab Commercial Bank to 70 per cent from 25 per cent currently,' he said.

Oea quoted Elmal as saying 'LFB will increase its stakes in two banks in Paris' but gave no details.

Opec member Libya, home to Africa's largest oil reserves, has seen revenue grow as it emerges from decades of Western sanctions, and the government is looking abroad for profitable investments.

Western companies have turned increasingly to Arab oil exporters and their sovereign wealth funds for cash as the financial crisis freezes credit markets and hits their market values.

Elmal was quoted by Oea as saying LFB is looking to expand its investments in North Africa, South and Eastern Africa as well as in China.

'We are  making efforts to invest in Brazil because it is a promising market,' he said. LFB, which has subsidiaries in France and Spain, will also inject more capital into Rome-based Banca UBAE, in which it holds a 49.9 per cent stake, according to its website.-Reuters




Tags: HSBC | Stake | Hike | Libyan Foreign Bank | British Arab Commercial Bank |

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