Client Case Studies

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Workshops for the development of Jordanian Shareholder awareness and activism - 2013

Client: Under the Patronage of H.E. the Chairman of the Jordanian Securities Commission 


Leading regulatory authorities in amending and unifying Corporate Governance Codes and Guidelines - 2013

Client: Three Jordanian Regulatory Authorities


Valuation and strategic consultation of shares purchase in an Italian Bank- 2012
Client: Central Bank of Libya (CBL) 


Advice on transferring ownership of overseas Libyan banks to the National Transitional Council - 2011
Client:
Libyan National Transitional Council (NTC)


Strategic Repositioning  - 2011

Client: North Africa Commercial Bank. S.A.L. (NACB)

Background

Founded in Beirut on the 22nd of October 1973, NACB currently operates as a commercial bank offering a variety of retail and commercial services and products both in Lebanon and abroad especially those related to documentary credits, credit facilities and foreign exchange.

NACB aims at improving and developing its services to its customers by expanding its operations, and offering new banking products.

 

Completed Assignments

GSG performed an evaluation of the bank’s current operations and banking networks, and proposed a new set of objectives and a strategy to re-position itself in light of specific risks as well as the changing systemic conditions

 


Bank Acquisition & Related Strategic Advice for a Majority Holding Investment - 2009

Client: Central Bank of Libya (CBL)

Background

The Central Bank of Libya (CBL) is 100% state ownership and represents the Libyan monetary authority. The law establishing the CBL stipulates that the objectives of the Central Bank shall be to maintain monetary stability in Libya, and to promote the sustained growth of the economy in accordance with the general economic policy of the state.

The CBL started its operations on April 1, 1956 to replace the Libyan Currency committee which was established in the year 1951 and whose functions were confined to maintaining sterling assets against the issue of local currency, thus having no role in controlling money supply or credit or in supervising banks.

 

Completed Assignment

The valuation was conducted for an international bank with a network spread over MENA, the GCC, Europe, the Americas and Asia. GSG conducted analyses, a valuation, and provided final recommendations on the existence/non-existence of possible synergies between the client and the Bank, on whether to further invest in the company, and eventually whether take a majority holding in the Bank


Corporate Repositioning & Technical Qualification for Merger & Acquisition Processes - 2008/2009

Client: Libyan Foreign Bank (LFB)

Background

Libyan Foreign Bank is a specialized trade finance bank, which focuses on linking the Libyan economy to international markets.
LFB has a portfolio of majority and minority strategic investments in over 28 overseas institutions
.

 

Completed Assignments: 

A) Complete Corporate Repositioning

  1. Revisiting the Corporate Strategy / Repositioning the Bank
  2. Achieving a High-Level Score in Corporate Governance
  3. Building an Integrated Risk Profile Framework 
  4. Implementing International Regulatory Requirements
  5. Producing a Set of IFRS-Compliant Financial Statements
  6. Obtaining an Investment Grade Rating
  7. Credit Risk Policy Manual

B) Technical Qualification for Acquisition Processes

     8.  Technical Qualification / Merger & Acquisition:


A) Complete Corporate Repositioning

1. Revisiting the Corporate Strategy / Repositioning the Bank

Contribution:

  • Identified a suitable Corporate Vision for LFB and build ex nihilo an adapted strategy. 
  • Obtained full-approval of the strategy from the Libyan authorities. As a result, the dispositions contained in the Strategy document were fully endorsed, and LFB was consequently granted a capital increase of USD two (02) billion (the first capital increase in the history of the bank), with the objective to reach a global equity position amounting to USD eight (08) billion within the coming two years.

Added Value:

The new Strategy equipped the bank with sound conceptual grounds, allowing it to position itself within the domestic, regional and global economic arena; it also helped the bank gain a strong credibility from its owners. This credibility was further crystallized by the remarkable commitment to endow the bank with solid financial foundations, allowing it to experience an increase of its equity-base from USD 1 billion to an expected USD 8 billion by the end of 2012.
Most importantly, LFB will be able to align all stakeholders’ incentives towards the future success of the bank in achieving its now clearly defined purpose, vision and mission.

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2. Achieving a High-Level Score in Corporate Governance

GSG was requested to produce a special document highlighting the most important components of sound corporate governance practices and the need to implement them in LFB as early as possible in order to qualify the bank for its acquisition of major financial institutions.

Our Contribution:

  • The production of a full document helping LFB meet two sets of requirements

A) Internal requirements, directed by LFB’s mission to follow best practices and governance principles; and

B) External requirements, driven by best practices in international mergers and acquisitions.

  • This partial implementation of the assignment fit in perfectly with the previously prepared “Strategy document”. It also ties in with the major strategic imperatives
  • The production of a Manual of Corporate Governance embracing both international best practices and domestic requirements
  • A set of charters designing the necessary board and management committees

Our Added Value:

Achieving a high level of Corporate Governance helps LFB enhance its organizational structure, oversight, disclosure, and other important requirements necessary for the bank to become a major bidder for acquiring international financial institutions.

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3. Building an Integrated Risk Profile Framework 

GSG was requested to help LFB control and monitor the risk by providing it with a standard risk profile.

Our Contribution:

  • The generation, using an internally risk matrix model, of a systematic appraisal of both the quantity and quality of risk (as applicable).
  • A set of dashboards and related recommendations for LFB in order to mitigate the risk level prevailing in the bank.
  • A conceptual risk framework partly derived from best practices.

Our Added Value:

GSG developed, for the first time in LFB’s history, an Integrated Risk Profile based on a thorough analysis of the risks prevailing at the bank.

A dedicated risk matrix tool was developed that allowed GSG to produce systematic and synaptic dashboards by risk category. GSG subsequently proposed a list of the most imperative findings and corresponding remedial actions.

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4. Implementing International Regulatory Requirements

GSG was asked to deliver an effective adoption of Basel II requirements under the standard approach and the enhancement of the Compliance function, including Anti-Money Laundering (ALM), Know Your Customer (KYC) and terrorism financing.

Our Contribution:

  • A framework for delivering the afore mentioned requirements.
  • As a result to the strategic implementation of ”Capital Increase”, the capital base of LFB was increased to meet Basel II requirements
  • A Basel II-complaint Capital Adequacy Guidelines Template
  • An adapted liquidity policy taking into account the needs and specificities of the bank in term of organization, lines and areas of business and risks.

Our Added Value:

By implementing the International Regulatory Requirements, GSG’s contribution to LFB was two-fold:

1. Insurance that the capital allocation of LFB is risk-adapted, by:

  • Separating and quantifying operational risk from credit risk
  • Aligning the economic and regulatory capital more closely to reduce the scope for regulatory arbitrage

2. Helping the client to comply with the following essential requirements:

  • Liquidity;
  • Compliance (ALM, KYC);
  • Financial information; and
  • Governance

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5. Producing a Set of IFRS-Compliant Financial Statements 

GSG was in charge of producing LFB’s financial statements, as well as, for the first time in the bank’s history, complete IFRS-compliant consolidated financial statements of the LFB Group.

Our Contribution

  • Production of the Group’s financial figures in accordance to IFRS standards as well as the local Libyan GAAPS (for the parent company).
  • These were also fully accepted by the legal auditors (KPMG – Egypt) without any qualification remarks in the related audit report despite the many value-adjustments proposed and performed by GSG.
  • Significant additional advisory services were performed by the GSG team during this assignment, including the following:
    • Pricing all of LFB’s financial investment positions at fair value 
    • Conducting special impairment tests studies 
    • Special consultancy on non-performing loans 
    • Working at disseminating best practices and transfer of know-how 
    • Providing the necessary support for the daily management of the bank, with special emphasis on financial, accounting, and related risk issues

Our Added Value:

For the first time in LFB’s history, a set of consolidated statements, in accordance to IFRS standards, was produced. 

Despite the significant changes introduced by this first IFRS adoption, the external auditors found no”historical cost” to ”fair value” translation issue. This was a great achievement for LFB as it was the first Libyan entity to have, on external auditing effective grounds, IFRS-compliant Group financial statements.

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6. Obtaining an Investment Grade Rating

GSG was requested to help LFB obtain an Investment Grade Rating from majors Credit Rating Institutions.

Our Contribution:

  • GSG consistently approached each of the previous assignments with the objective of obtaining an investment grade for LFB. Each step, from the definition of a suitable strategy for LFB to the implementation of international regulatory requirements, was specifically considered and designed according to its beneficial impact on the likelihood of obtaining an investment grade rating.
  • Prepared all required files for the submission of a credit rating from the three (03) main recognized agencies (Standard & Poors, Moody’s, and Fitch Ratings).

Our Added Value:

GSG ensured that all rating agencies were ready to accept the premise of solicited ratings, and LFB became ready to proceed with the rating process at any subsequent time. 

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7. LFB Credit Risk Policy Manual

GSG was requested to produce a Credit Risk Policy Manual in accordance with the requirements of the Central Bank of Libya. 

Our Contribution:

  • Production of a full set of policies taking into consideration the specificities of the Libyan banking and best practices.

As a result, the Credit Risk Policy Manual was perfectly adapted to current and future client needs

The Manual was established in line with the developed best Corporate Governance practices at LFB.

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B) Technical Qualification for Acquisition Processes

8. Technical Qualification / Merger & Acquisition:

GSG was asked to prepare a complete technical qualification file with the aim of assisting LFB in drafting a non-binding financial offer for the acquisitions of a) “Banque du Caire” and b) “British Arab Commercial Bank”.

Our Contribution:

a) Valuation of “British Arab Commercial Bank” (BACB) for acquisition:
BACB, based in the City of London, is a wholesale bank and a leading provider of trade and project finance for Arab markets. The bank’s largest single shareholder is HSBC Bank Middle East. GSG was requested by the along with HSBC to assess the viability of obtaining a majority shareholding in BACB and a final price.

b) Valuation of “Banque du Caire” for acquisition:
Banque du Caire, through its branches across Egypt, finances all sectors of economic activity, as well small, medium and micro enterprises.
GSG conducted business and financial due diligence to provide the involved parties with final recommendations.

Our Added Value:

GSG clearly communicated the preliminary conditions that were expected to be filled to ensure successful qualification of LFB during major acquisition processes and deals. A strong emphasis was placed on the necessary reforms to be undertaken at the LFB level in order to be a suitable international bidder for major equity/privatization deals.

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Strategic Restructuring - 2008

Client: Ares Bank

Background

Founded in 1975, Ares Bank's objective has been to contribute to the development of Spanish cooperation with the Arab countries through banking and financing of foreign trade and the promotion of investments by increasing its financial resources through the fund raising of deposits from the Arab and international markets.

 

Completed Assignment

GSG performed an evaluation of the bank’s then current operations and proposed a new set of objectives and a strategy to better position itself in light of changing market, economic and systemic conditions.


Strategic Corporate Governance, Valuation and Reorganization - 2008

Client: A Saudi Arabian Conglomerate (Confidential)

Background

One of the leading companies in its field in Saudi Arabia, this enterprise has regularly featured among the top 100 Saudi companies over the last 10 years. The company’s multiple branches provide specialized services throughout the Kingdom.

 

Completed Assignment

GSG completed the following sub-projects:

  • The complete reorganization of their Finance department
  • Undertook major reform of the client’s corporate governance structure
  • Performed the valuation of its majority holding in one of its allied companies for negotiations over a full takeover.