Listen to the article
The Association of Banks in Lebanon (ABL) is preparing to elect its new board of directors next Wednesday. Consensus has historically shaped the outcome of each election, and this year’s electoral process is equally critical, mirroring the importance of the two previous ones, given the precise circumstances, ongoing presidential vacancy, financial crisis, and serious security situation.
On Wednesday, July 10, 2024, the extraordinary general assembly of the Association of Banks will convene with a sole agenda item: to amend Article 13 of the association’s statute. The proposed amendment aims to extend the term of the current board of directors, led by Dr. Salim Sfeir, to avoid a contentious electoral battle influenced by factors not in the public interest during this delicate situation. This is especially critical amidst efforts to harmonize decisions or at least minimize divergence concerning the banking crisis and its resolution. Consequently, mediators are actively working on multiple fronts to secure the necessary quorum for tomorrow and ensure the smooth proceedings of the general assembly.
To date, the financial accounts have not been finalized, and efforts to ensure the necessary quorum for the scheduled general assembly on July 10 have not yielded definitive results. The assembly aims to amend the statute of the Association of Banks and re-elect Dr. Salim Sfeir as president, along with other members. Additionally, there is a possibility of introducing further amendments to include new members on the board of directors.
There is clear divergence among association members regarding approaches to crisis management and proposed solutions, which is typical within any association, union, or board of directors. Meanwhile, certain smaller banks insist on the need to expand their role in shaping the assembly’s decisions during these exceptional circumstances.
Pursuant to the Association of Banks’ statute, convening the extraordinary general assembly requires the presence of at least 75% of its members. Moreover, any decision regarding the statute or the amendment of its articles requires the approval of the majority of its members, specifically 75% of them. This currently applies to the need to amend Article 13 to extend the term of the current board.
According to the Association of Banks’ statute, Sfeir, who has chaired the board for two consecutive terms, cannot run for a third term without amending the statute. Sfeir initially became the Association of Banks’ president in 2019, before the onset of the financial crisis, and was re-elected in 2021. Then, an exceptional one-year extension was granted to the board, concluding this July.
Thus far, opinions diverge between the majority of banks and a minority, notably with a coalition of smaller banks aiming to exert pressure on the current or any new board by securing representation with two members on the association’s board in exchange for ensuring the quorum in the upcoming assembly.
These banks are pressing for an amendment to the association’s statute, seeking to expand the board of directors from 12 members to 14. They suggest adjusting the current composition of 6 Muslims and 6 Christians to 7 members of each community.
The proposal put forth by these banks centers on either accepting these two new board members or failing to secure the required quorum for the upcoming extraordinary general assembly on Wednesday which is intended to amend the statute and extend Salim Sfeir’s tenure. If the quorum is not met, it could prompt the need to convene a new general assembly, potentially resulting in Salim Sfeir being excluded from the presidency of the association, citing concerns from smaller banks about their future in any forthcoming sector restructuring plan. However, the crucial issue is that, currently, there is no potential candidate for the presidency of the association if the statute remains unchanged and Salim Sfeir continues to lead.
The upcoming hours will be pivotal in determining the outcome of the Association of Banks’ elections, amidst concerns about potential vacancies and caretaker management that could affect the association’s decision-making and negotiations during this crucial phase of financial and banking legislation.
