Vying for Shares Competition is fierce in the Lebanese banking sector as local banks are vying for the shares of local, regional, and/or international banks. London-based Standard Chartered bank is up...

Vying for Shares

Competition is fierce in the Lebanese banking sector as local banks are vying for the shares of local, regional, and/or international banks. London-based Standard Chartered bank is up for bids, and domestic banks are rolling up their sleeves in anticipation. Standard Chartered is headquartered in a key urban area, has three branches, and has licenses to open two more branches – a very lucrative prospect for any investment bank with no branches or trained employees. Its total deposits are only U.S. $80 million, a very small amount compared to deposits of other Lebanese lenders. Even though Standard Chartered’s operations in Lebanon are relatively small compared to its activities in other emerging countries, the bank is attractive. Four banks stand out as the main competitors: International Bank of Lebanon, First National Bank, Audi Bank, and Cedrus Invest Bank.

Audi Bank is mainly interested in the retail operations of Standard Chartered and has begun talks in that domain. On the other hand, Cedrus Invest Bank seems to have a larger objective in mind. Cedrus Invest Bank is the largest specialized bank in Lebanon in terms of capitalization, with a paid-up capital of U.S. $52 million and more than U.S. $400 million in assets under management and administration. It can take advantage of Standard Chartered’s opportunities. Cedrus is keen to realize the full potential of Standard Chartered in Lebanon, and plans to do so by acquiring the license and assets of the bank and expanding its business to commercial banking.

1. How far should banks go to gather competitive intelligence?

2. Where should the line be drawn?