Post by shantiacquilar on Sept 30, 2009 1:33:26 GMT 4
By John Irish
ABU DHABI (Reuters) - Libya aims to privatise part of the National Commercial Bank (NCB) and will open the sector to competition by selling bank licences to help diversify its economy away from oil, its central bank governor said on Monday.
OPEC member Libya, home to Africa's largest proven oil reserves, has seen revenue grow as it emerges from decades of Western sanctions, but the government is struggling to reform a highly centralised banking system, which is widely seen as an obstacle to private investment and growth.
"There will be bidding next year for two to three licences for new banks," Farhat Omar Bin Guidara told reporters on the sidelines of a central bank governors meeting in Abu Dhabi.
The tender process would be open to international banks, who would not need a local partner, he said.
The move follows the flotation of 15 percent of Al Joumhouriya Bank on the local stock market earlier this year and government steps in May to set regulations for its commercial banks to seek strategic partnerships with foreign banks.
The measures are part of the central bank's strategy of reforming the banking system and improving its competitiveness.
Bin Guidara said a 15 percent stake in NCB worth 50 million dinars would be floated before the end of 2009 after already selling holdings in two other banks to foreign lenders in 2007 and 2008.
SLOWING GRWOTH, OVERSEAS INVESTMENTS
The fall in oil prices, which have slumped from a peak of about $147 a barrel in mid-2008 to around $70, would impact 2009 growth.
"This year because of the downturn in oil prices our reserves have come down," Bin Guidara said. "In terms of GDP ... overall it's about 2 percent."
The IMF said in June it expected Libya's growth to slow to 1.1 percent in 2009 from 6.7 percent last year.
Still, with its 2009 budget based on $45/bbl, the government expects accumulated reserves this year of about $5 billion, bin Guidara said.
With its surplus, Libya has been snapping up stakes overseas, especially in major Italian firms like UniCredit and Eni. Bin Guidara, who is a trustee on the board of the country's $65 billion sovereign wealth fund, said it was likely to focus on low to medium-risk investments after investing about $4 billion in 2008, its first year of operations.
"It made a good profit in 2008 ... They are taking a low to medium-risk approach for 2009 and probably 2010," bin Guidara said, adding the fund would look at oil, utilities and pharmaceuticals.
Bin Guidara said he was not aware of talks over possible investments in power producer Enel or raising its stake in Eni after the Libyan Investment Authority said in June it was eyeing further investments in Italy.
Libya's foreign assets were about $136 billion at the end of 2008 and the central bank's reserves equivalent to about $75 billion, with 90 percent held in dollars and euros, he said.
ABU DHABI (Reuters) - Libya aims to privatise part of the National Commercial Bank (NCB) and will open the sector to competition by selling bank licences to help diversify its economy away from oil, its central bank governor said on Monday.
OPEC member Libya, home to Africa's largest proven oil reserves, has seen revenue grow as it emerges from decades of Western sanctions, but the government is struggling to reform a highly centralised banking system, which is widely seen as an obstacle to private investment and growth.
"There will be bidding next year for two to three licences for new banks," Farhat Omar Bin Guidara told reporters on the sidelines of a central bank governors meeting in Abu Dhabi.
The tender process would be open to international banks, who would not need a local partner, he said.
The move follows the flotation of 15 percent of Al Joumhouriya Bank on the local stock market earlier this year and government steps in May to set regulations for its commercial banks to seek strategic partnerships with foreign banks.
The measures are part of the central bank's strategy of reforming the banking system and improving its competitiveness.
Bin Guidara said a 15 percent stake in NCB worth 50 million dinars would be floated before the end of 2009 after already selling holdings in two other banks to foreign lenders in 2007 and 2008.
SLOWING GRWOTH, OVERSEAS INVESTMENTS
The fall in oil prices, which have slumped from a peak of about $147 a barrel in mid-2008 to around $70, would impact 2009 growth.
"This year because of the downturn in oil prices our reserves have come down," Bin Guidara said. "In terms of GDP ... overall it's about 2 percent."
The IMF said in June it expected Libya's growth to slow to 1.1 percent in 2009 from 6.7 percent last year.
Still, with its 2009 budget based on $45/bbl, the government expects accumulated reserves this year of about $5 billion, bin Guidara said.
With its surplus, Libya has been snapping up stakes overseas, especially in major Italian firms like UniCredit and Eni. Bin Guidara, who is a trustee on the board of the country's $65 billion sovereign wealth fund, said it was likely to focus on low to medium-risk investments after investing about $4 billion in 2008, its first year of operations.
"It made a good profit in 2008 ... They are taking a low to medium-risk approach for 2009 and probably 2010," bin Guidara said, adding the fund would look at oil, utilities and pharmaceuticals.
Bin Guidara said he was not aware of talks over possible investments in power producer Enel or raising its stake in Eni after the Libyan Investment Authority said in June it was eyeing further investments in Italy.
Libya's foreign assets were about $136 billion at the end of 2008 and the central bank's reserves equivalent to about $75 billion, with 90 percent held in dollars and euros, he said.