Through the combined efforts of everyone and the adoption of a comprehensive strategic transformation plan launched at the Libyan Foreign Bank three years ago in collaboration with major international consultancy firms, including Deloitte, Ernst & Young, and Curtis, we have started to achieve our set goals.
We realized net profits of $804 million in 2022 and 2023, an unprecedented profit level in the history of the Libyan Foreign Bank. This achievement would not have been possible without the concerted efforts of the bank’s employees and our strategic partners. The exceptional profit rate can be attributed to several factors, notably:
- The regular flow of oil revenues due to the efforts of the National Oil Corporation, our strategic partner.
- Profits from some of the bank’s foreign investments.
- Improved performance of the bank’s investment portfolio.
When we took over the bank three years ago, it was burdened with a legacy of accumulated problems, primarily the historical losses in the bank’s investment portfolio, which exceeded $1 billion due to investments in non-listed bonds and deviations from the investment policy, as well as weak oversight and communication with the bank’s foreign investments, the lack of preparation of consolidated financial statements according to IFRS standards, and the underperformance of the three lines of defense (audit, risk, compliance) and the absence of a governance and transparency approach in the bank’s performance.
Over the past three years, we have focused on enforcing a comprehensive strategic transformation by partnering with leading international consultancy firms. Together, we conducted a bold assessment of the bank’s reality, analyzed gaps and shortcomings, identified strategic priorities, and adopted a project management approach to achieve our goals. The transformation covered two main axes: addressing the previous legacy and improving investment performance.
The efforts of the Attorney General and members of the prosecution played a pivotal role in the transformation by overseeing an international forensic audit of the bank’s investment portfolio, which revealed the flawed investment practices that led to past losses. We drew lessons from this to improve our portfolio and recover some of the losses.
We have ensured the implementation of a governance approach within the bank, with the Board of Directors operating through specialized committees, including Risk, Audit, IT Governance, Compliance, Legal, and Appointments. We increased disclosure and transparency rates by preparing consolidated and audited financial statements according to IFRS standards, working according to specific and timed plans, and protecting our foreign assets from seizure and execution. We also developed and adopted a set of policies and systems governing the bank’s work and rebuilt the three lines of defense.
We continue to execute the comprehensive strategic transformation, with our next focus on improving the performance of our foreign investments, ensuring their capital adequacy, and compliance with regulatory requirements in their respective countries. We aim to enhance their returns in a globally competitive and rapidly changing market.
Additionally, we seek to continue developing the performance of our investment portfolio by investing in financial products that yield significant returns without jeopardizing the safety of our investments. We also aim to fulfill our bank’s role in driving trade and investment domestically through our contributions to national banks and companies, which we strive to support in financing projects and introducing financial products needed in the Libyan market, such as leasing. We also rely on our bank to play a national role in encouraging foreign investors to enter Libya by overcoming investment guarantee challenges that hinder the targeted return of foreign capital.
As I stated three years ago, the transformation train at the Libyan Foreign Bank has started, and today I affirm that it has begun reaching its targeted profitability and return stages, with work continuing to achieve comprehensive transformation despite challenges and obstacles.
Mustafa Al-Mana
Member of the Management Committee and Chairman of the Governance Committee, Libyan Foreign Bank
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