Manama, Bahrain: It is business as usual at Arab Banking Corporation (ABC) which benefits from general licences issued by both the UK and the USA’s Treasuries authorizing normal operations to continue.
The scope of such general licences make it clear that banks and other counterparties are free to transact with the ABC Group and its subsidiaries as neither ABC nor any of its subsidiaries is subject to asset freezes as a result of developments in Libya.
The terms of the UK’s HM Treasury General Licence issued on March 3, 2011 should permit transactions with ABC and each of its subsidiaries to the extent that any such transactions would otherwise have been restricted by The Libyan (Financial Sanctions) Order 2011 and, to the extent it applies, Council Regulation (EU) No 204/2011.
Similarly, the ABC Group falls within the scope of General Licence No. 1A issued by the US Treasury on March 4, 2011 (which replaced General Licence No. 1 issued on February 25, 2011). General Licence No. 1A permits United States persons to continue to transact with the ABC Group, notwithstanding the assets freeze that was imposed on various Libyan and Libyan related persons by the previous Executive Order (No. 13566).
The Central Bank of Bahrain, the home regulator of the ABC Group, also issued a statement affirming that it is not aware of any reason that would lead it to conclude that restrictive financial measures should be imposed against any member of the ABC Group as a result of United Nations Security Council Resolution 1970 (2011).
The Central Bank of Libya owns 59.3% of ABC and the Kuwait Investment Authority has a 29.6% stake in the bank. ABC, which was established under the laws of the Kingdom of Bahrain, is regulated as a wholesale conventional bank by the Central Bank of Bahrain and its shares are listed on the Bahrain Bourse.
ABC’s total assets as of 31 December 2010 stood at US$28,105 million. Short term placements with banks and financial institutions increased to maintain liquidity which remains comfortable with liquid assets to deposits ratio at the year-end of 72% compared to 71% in the previous year. Shareholders’ equity at 31 December 2010 stood at US$3,428 million compared to US$2,191 million the previous year, boosted by the US$1,110 million share capital increase in the first quarter of 2010. ABC Group’s capital adequacy ratio at 2010 year-end was very strong at 23.1%, predominantly Tier 1, which totalled 18.4%.