Manama, Bahrain: Arab Banking Corporation (B.S.C.) (“ABC”) confirms that neither ABC nor any of its subsidiaries are subject to the asset freezes specified in the US Executive Order or UN Resolution 1970 and that all members of the ABC Group are able to transact freely in the United States and elsewhere.
The ABC Group has a policy of rigorously complying with all applicable sanctions and has conducted, and will continue to conduct, all its dealings in compliance with all applicable laws and regulations.
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 announcement follows the issuing by the President of the United States of America, an executive order under the International Emergency Economic Powers Act on 25 February 2011 (the “Executive Order”). The Executive Order blocks the assets (to the extent that such assets are in the United States of America or are in the possession or control of United States persons) of various individuals and entities in Libya and of entities controlled by them.
The United States Department of the Treasury issued General License No. 1 on 25 February 2011 in connection with the Executive Order (the “General License”). The General License provides that “all transactions are authorised with financial institutions owned or controlled by the Government of Libya that are organised under the laws of a country other than Libya”.
The United Nations Security Council recently passed a resolution (“Resolution 1970”), which calls upon United Nations member states to impose an assets freeze on various Libyan persons and, consequently, it is expected that a large number of jurisdictions will implement asset freezes in response to Resolution 1970.
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%.