CONTENTS
BOARD OF DIRECTORS AND MANAGEMENT
Chairman’s letter
STATEMENT OF FINANCIAL POSITION
Off Balance Sheet
Income statement
FINANCIAL HIGHLIGHTS 2015
BANK AUDI ADDRESSES
06
07
08
10
11
12
13
01
02
03
04
06
07
05
BOARD OF DIRECTORS
Member of the Audit Committee
Member of the Risk Committee
Member of theRemuneration
Committee
Mr. Philippe R. SEDNAOUI Chairman
Mr. Fady G. AMATOURY Member
Mr. Toufic R. AOUAD Member
Dr. Khalil M. BITAR Member Chair
Mrs. Wafaa S. DAOUK Member
Dr. Joe A. DEBBANE Member Chair
Mr. Georges S. DOUMITH Member Chair
Mr. Salam G. NADDA Member
Bank Audi sal Member
MANAGEMENT
Mr. Philippe R. SEDNAOUI Chairman and General Manager
Mr. Toufic R. AOUAD General Manager
AUDITORS
Ernst & Young p.c.c.
BDO, Semaan Gholam & Co.
LEGAL ADVISORS
MM. Ramzi Joreige & Partners Law Firm
06Audi Private Bank sal
BOARD OF DIRECTORS AND MANAGEMENT01
The profound restructuring of the wealth industry has continued unabated in 2015, with several international players exiting totally or partly their market coverage due to increased regulatory standards and reputational exposure, in markets where they did not fully apprehend the local customer base.
2015 has been another year of solid development of the private banking and wealth franchise of our company. This performance has been recognized by the prestigious Euromoney publication that awarded APB the award of best wealth manager of the Middle East in May 2016.
More than ever and as a strategic decision, Audi Private Bank is dedicated to furthering the coverage of its client base in the greater Middle East, Africa and Latin America in close harmony with the overall footprint of the Bank Audi Group.
In 2015 APB achieved solid results, with net profit increasing by approximately 7% and reaching LL 32 billion. This positive result was fundamentally due to a 13% increase in fee based revenue, on the back notably of an expansion in our assets under discretionary management and transactional volumes in the FX and advisory activities.
Also noteworthy to report in 2015, was the launch by Bank Audi sal and APB of a joint service to offer international wealth services to clients of Bank Audi in Lebanon. This service permits access to all private banking bookings along with constant monitoring of clients investment portfolios.
The above successes were achieved while fully implementing the modern investment rules edicted by the CMA in 2015 for the Lebanese capital markets, including the launch of several IT developments covering client suitability and investments as well as other regulatory requirements.
We are confident that 2015 has laid firm footings for the year to come and take this opportunity to thank all our colleagues for their valuable work and dedication, and our clients whose best interests we are here to serve for their trust and loyalty.
Philippe R. SednaouiChairman of the Board
07Annual Report 2015
CHAIRMAN’S LETTER02
08
AS AT31/12/15 31/12/14
LL C/V LL Total LL C/V LL Total
ASSETS
Cash and balances with Central Banks 8.459 256.548 265.007 13.094 258.070 271.164
Deposits with banks and financial institutions 17 17.836 17.853 18 22.592 22.610
Due from head office, sister, related banks and financial institutions 305.183 1.089.549 1.394.732 318.336 1.080.782 1.399.118
Loans to banks and financial institutions and reverse repurchase agreements - - - - - -
Financial assets given as collateral - - - - - -
Derivative financial instruments 870 251 1.121 471 131 602
Shares and participations at fair value through profit and loss - 7.954 7.954 - 10.015 10.015
Debt instruments and other similar financial assets at fair value through profit and loss - - - - - -
Of which: Net advances and loans at fair value through profit and loss - - - - - -
Net loans and advances to customers at amortized cost(1) 30.002 204.844 234.846 30.142 232.423 262.565
Net loans and advances to related parties at amortized cost(2) - 8.943 8.943 - 10.006 10.006
Debtors by acceptances - - - - - -
Debt instruments classified at amortized cost(3) - 15.903 15.903 - 15.906 15.906
Shares and participations at fair value through other comprehensive income 4.018 580 4.598 3.904 569 4.473
Investments in associates 8.335 88.280 96.615 8.335 88.280 96.615
Assets taken in settlement of debts 41 3.135 3.176 41 3.135 3.176
Property and equipment 1.290 6 1.296 1.415 2 1.417
Intangible fixed assets 1.248 - 1.248 1.090 - 1.090
Non current assets held for sale - - - - - -
Other assets 5.336 2.939 8.275 3.490 1.198 4.688
Goodwill - - - - - -
Total 364.799 1.696.768 2.061.567 380.336 1.723.109 2.103.445
(1) After deduction of provisions amounting to LBP 20.619 million from loans and advances to customers as per IAS 39, of which LBP 900 million representing provisions on collective assessment.
(2) Loans granted to related parties against cash collateral amounted to LBP 8.900 million.(3) Includes an amount of LBP (million) 15.903 representing Lebanese Eurobonds.
STATEMENT OF FINANCIAL POSITION(in LBP millions)03
Audi Private Bank sal
09Annual Report 2015
AS AT31/12/15 31/12/14
LL C/V LL Total LL C/V LL Total
LIABILITIES AND SHAREHOLDERS’ EQUITY
Due to Central Banks - - - - - -
Due to banks and financial institutions and repurchase agreement 185 68 253 1.281 1.636 2.917
Due to head office, sister, related banks and financial institutions - 356 356 2.976 23.454 26.430
Financial assets taken as a guarantee - - - - - -
Derivative financial instruments 966 - 966 1.160 - 1.160
Financial liabilities at fair value through profit and loss - - - - - -
Of which: deposits at fair value through profit and loss - - - - - -
Customers' deposits at amortised cost 138.822 1.614.240 1.753.062 179.914 1.597.797 1.777.711
Deposits from related parties at amortized cost 4.808 28.649 33.457 3.561 47.974 51.535
Debt issued and other borrowed funds - - - - - -
Engagements by acceptances - - - - - -
Other liabilities 19.285 1.236 20.521 20.576 2.498 23.074
Provisions for risks and charges 8.182 - 8.182 7.390 - 7.390
Subordinated loans and similar debts - - - - - -
Non current liabilities held for sale - - - - - -
Total liabilities 172.248 1.644.549 1.816.797 216.858 1.673.359 1.890.217
SHAREHOLDERS' EQUITY - GROUP SHARE
Capital - Common shares 40.000 - 40.000 40.000 - 40.000
Capital - Preferred shares - - - - - -
Issue premium - Common shares - - - - - -
Issue premium - Preferred shares - - - - - -
Subsidiary shares warrants - - - - - -
Share Capital and Cash contribution to capital - - - - - -
Non distributable reserves 70.640 32.167 102.807 64.262 29.707 93.969
Distributable reserves 43.914 3.317 47.231 43.914 3.317 47.231
Treasury shares - - - - - -
Retained earnings 21.073 - 21.073 362 - 362
Proposed dividends - - - - - -
Revaluation reserve of real estate - - - - - -
Reserve on revaluation of financial assets at fair value through other comprehensive income 2.521 128 2.649 2.424 118 2.542
Remeasurement actuarial (gain)/Loss on defined benefit plan (528) - (528) (425) - (425)
Share of associates' other comprehensive income under equity method - - - - - -
Foreign currency translation reserve - - - - - -
Net (loss) gain on hedge of net investments in foreign entities - - - - - -
Result of the current Period 31.538 - 31.538 29.549 - 29.549
Shareholders' Equity - Group Share 209.158 35.612 244.770 180.086 33.142 213.228
Non Controlling Interest - - - - - -
Total shareholder's equity - - - - - -
Total liabilities and equity 381.406 1.680.161 2.061.567 396.944 1.706.501 2.103.445
10
AS AT31/12/15 31/12/14
LL C/V LL Total LL C/V LL Total
Financing commitments- Financing commitments given to banks and financial
institutions - - - - - - -
- Financing commitments given to customers - 33.809 33.809 - 34.876 34.876
Bank guarantees
- Guarantees given to to banks and financial institutions 415 14.015 14.430 415 14.015 14.430
Of which: credit derivatives - - - - - -
- Guarantees received from banks and financial institutions - - - - - -
Of which: credit derivatives - - - - - -
- Guarantees given to customers 1.877 1.367 3.244 1.862 1.894 3.756
- Guarantees received from customers 59.302 407.095 466.397 57.844 447.742 505.586
Financial notes commitments
- Financial notes commitments to be received - - - - - -
Of which: financial instruments sold with a buy back option - - - - - -
- Financial notes commitments to be delivered - - - - - -
Of which: financial instruments purchased with a buy back option - - - - - -
Foreign currencies forwards
- Foreign currencies to receive - 234.127 234.127 - 135.201 135.201
- Foreign currencies to deliver - 234.223 234.223 - 135.890 135.890
Commitments on term financial instruments - 27.523 27.523 - - -
Other Commitments 38 - 38 91 - 91
Claims from legal cases - - - - - -
Fiduciary accounts 2.112 597.330 599.442 3.512 558.244 561.756
Under specific instructions 2.112 597.330 599.442 3.512 558.244 561.756
Under discretionary investments - - - - - -
Assets under management 56.666 1.826.816 1.883.482 51.865 1.690.164 1.742.029
Mutual funds - - - - - -
Structured financial products - - - - - -
Engagement unlikely to be executed - - - - - -
Bad debts written off during the year 667 11.418 12.085 127 5.825 5.952
OFF BALANCE SHEET(in LBP millions)04
Audi Private Bank sal
11Annual Report 2015
31/12/15 31/12/14
Interest and similar income 88.894 94.880
Interest and similar expense (48.198) (50.992)
Net interest margin 40.696 43.888
Fee and commission income 17.081 15.959
Fee and commission expense (1.236) (1.551)
Net Fee and commission Income 15.845 14.408
Net gain on financial assets or liabilities at fair value through profit and loss 2.167 2.319
Of which: interest income - -
Net gain on financial investments 84 74
Other operating Income 2.362 1.162
Total operating income 61.154 61.851
Net provisions for credit losses 1.541 1.900
Credit losses related to debt instruments classified at amortized cost - -
Provision for doubtful accounts (114) (350)
Recoveries of provisions for doubtful accounts 1.655 2.250
Impairement on related financial investments - (283)
Net Operating income 62.695 63.468
Personnel expenses (15.674) (15.480)
Other operating expenses (8.770) (11.876)
Depreciation of property and equipment (388) (351)
Amortization of intangible assets (384) (333)
Impairment of goodwill - -
Total Operating Expenses (25.216) (28.040)
Operating Profit 37.479 35.428
Share of profit of associates under equity method - -
Net gain (loss) on sale or disposal of other asset (1) -
Profit before tax 37.478 35.428
Income tax (5.940) (5.879)
Profit after tax 31.538 29.549
Result of discontinued operations, net of tax - -
Profit for the current period 31.538 29.549
Minority Share Profit for the current period - -
Group Share Profit for the current period - -
Basic earnings per share LBP - -
Diluted earnings per share LBP - -
Basic earnings per share from continuing operations LBP - -
Diluted earnings per share from continuing operations LBP - -
INCOME STATEMENT(in LBP millions)05
Year 2015 is yet another year of growth for Audi Private Bank (APB) amidst erratic market conditions both domestically and regionally.
Total footings (on-balance sheet assets and off-balance sheet assets under management) have grown by 3.11%, moving from LL 4,407
billion to LL 4,544 billion as at end of 2015.
Off balance sheet assets under management have increased significantly by 8.12% moving from LL 1,742 billion as of December
2014 to LL 1,883 billion as of December 2015; customers’ deposits reached a total of LL 1,786 billion despite stagnation witnessed
in the Lebanese market.
Audi Private Bank has complied with the group decision to distribute dividends. As a result, APB’s net interest income went down from
LL 44 billion to LL 41 billion. This decrease was offset by a year-on-year increase of 13% in non-interest income recording LL 20 billion.
Mainly driven by net fees and commissions income (+9.97%).
Adding to the above, net recoveries on credit losses and provision on impairment of financial instruments equal to LL 1.54 billion.
Within the context of a better control of expenses, APB has managed to decrease YoY by 10% its General operating expenses moving
from LL 28 billion to LL 25 billion.
Audi Private Bank has succeeded to maintain its fast growing track, by achieving YoY an increase of the net profit 6.73% (LL 32 billion).
12
FINANCIAL HIGHLIGHTS 201506
Audi Private Bank sal
BANK AUDI
BANK AUDI salBeirutHEADQUARTERS Tel: +961 1 994 000Bank Audi Plaza Fax: +961 1 990 555Bab Idriss Customer Helpline: +961 4 727777P.O. Box 11-2560 [email protected], Lebanon bankaudigroup.com
COUNTRY MANAGEMENT - LEBANONBank Audi Palladium Tel: +961 1 994 000Bab Idriss Fax: +961 1 990 555P.O Box 11-2560 [email protected], Lebanon bankaudi.com.lb
M1 Building Tel: +961 1 994000Bab Idriss Fax: +961 1 990555P.O. Box 11-2560 [email protected], Lebanon bankaudi.com.lb
BANK AUDI FRANCE saParis Tel: +33 1 53 83 50 0073 Champs-Elysées Avenue Fax: +33 1 42 56 09 74 75008 Paris, France [email protected] bankaudi.fr
BANK AUDI LLC
DohaQatar Financial Centre Tower, 18th Fl. Tel: +974 44967365Diplomatic Area, West Bay Fax: +974 44967373P.O. Box 23270 [email protected], Qatar bankaudipb.com
BANK AUDIINVESTMENT BANK
AUDI INVESTMENT BANK salBeirut Bank Audi Plaza Tel: +961 1 994 000Block B, Bab Idriss Fax: +961 1 999 406P.O. Box 16-5110 [email protected], Lebanon bankaudigroup.com
BANK AUDIPRIVATE BANK
AUDI PRIVATE BANK salBeirutHEAD OFFICEBank Audi Plaza Tel: +961 1 954 800, 954 900Block D, Bab Idriss Fax: +961 1 954 880P.O. Box 11-1121 [email protected], Lebanon bankaudipb.com
BRANCHBank Audi Plaza Tel: +961 1 954 800, 954 900Block D, Bab Idriss Fax: +961 1 991 287, 954 841Beirut, Lebanon [email protected]
BANQUE AUDI (SUISSE) SA
HEAD OFFICEGeneva Tel: +41 22 704 11 1118, Cours des Bastions Fax: +41 22 704 11 00P.O. Box 384 [email protected] Geneva 12, Switzerland bankaudipb.com
REPRESENTATIVE OFFICEBeirutBank Audi PlazaBab IdrissP.O. Box 11-2666 Tel: +961 1 977 544Beirut, Lebanon Fax: +961 1 980 535
AUDI CAPITAL (KSA) cjscRiyadh2980 Centria Bldg., 3rd Floor, PrinceMohammad Bin Abdul Aziz Road(Tahlia). Postal Address: Unit No. 28 Tel: +966 1 2199300Ar Riyadh 12241-6055 Fax: +966 1 4627942P.O. Box 250744 Riyadh 11391 [email protected] of Saudi Arabia audicapital.com
AUDI CAPITAL GESTION samMonaco Tel: +377 97 97 65 11Monte-Carlo Palace Fax: +377 97 97 65 193-9 Boulevard des Moulins [email protected] - 98000 Monaco bankaudipb.com
BANK AUDI salAbu Dhabi REPRESENTATIVE OFFICEEtihad Towers, Tower 3, 15th Fl. Tel: +971 2 6331180Office 1503, Corniche Street Fax: +971 2 6336044P.O. Box 94409 Abu Dhabi [email protected] Arab Emirates bankaudipb.com
13Annual Report 2015
BANK AUDI ADDRESSES07
Nothing is more valuable than family. At Bank Audi Private Bank, we believe that the most important bonds are the ones forged over time.
Beyond sharing your region and culture, we also share your values, giving us a deeper understanding of who you are. It is for this reason that we can create the most effective strategies to help you manage your wealth and ensure a prosperous future for your family. Our private bankers understand that true wealth isn’t an inheritance passed down, but rather the wisdom of an entire generation.
Every banker knows the value of wealth.Few know the wealth of values.
bankaudipb.com