Intra bank
| Intra bank | |
|---|---|
| legal form | Public company (Société Anonyme Libanaise) |
| founding | 1951 |
| resolution | 1966 |
| Reason for dissolution | insolvency |
| Seat | Beirut , Lebanon |
| management | Yousef Beidas |
| Branch | Credit institution |
The Intra Bank (also Banque Intra , Arabic بنك انترا) was a Lebanese bank and until its collapse in 1966 one of the largest financial institutions in the Middle East .
history
Foundation and advancement
The bank was founded in 1951 by Yousef Beidas and three partners as the trading company "International Traders" ( telex address : Intra), as there was no banking law in Lebanon. The company began as a money changer and as a trading company for Ford , the office equipment manufacturer Facit and other international companies. International Traders quickly rose to become Beirut's premier money exchange institution, and many wealthy Lebanese people became Intra foreign exchange clients as late as the 1950s. Soon the oil-producing countries of Arabia were also among the customers (including King Faisal ibn Abd al-Aziz , the Emir of Kuwait , the Sheikhs of Abu Dhabi and Qatar ). The company expanded to Africa, Europe and America. Intra opened its own branches in New York , London , Paris , Geneva , Frankfurt am Main , Rome , Brazil and North and West Africa.
The bank soon invested worldwide, owned real estate in New York and Paris and was a co-owner of the Beirut port company, several luxury hotels in Lebanon and majority owner of the Middle East Airlines . In France, the bank owned 80% of the shares in a shipyard in La Ciotat near Toulon . On the avenue des Champs-Élysées in Paris, the Intra Bank had acquired a 6,000 square meter plot of land for 70 million marks, on which a glass office palace with a cinema and swimming pool was to be built. In Belgium , the bank had acquired a majority stake in the “Société Chimique de Pont Brûle”. In addition, the company had its own investment fund , the Atlas Fund , which invested exclusively in American securities .
In 1965 the balance sheet total was over 925.4 million Lebanese pounds (almost 1.4 billion DM). The deposits amounted to around 745 million pounds, of which 305 million are said to have been available in cash and 352.1 million were loaned out. The paid-in capital was 60 million pounds, it is said to have been doubled to 120 million shortly before the crisis. However, the reserves were very low at 18.3 million.
collapse
Intra-Bank founder Beidas fled Jerusalem in 1948 after the establishment of the state of Israel . The Palestinian therefore strongly sympathized with Fatah , which wanted to destroy the state of Israel, and also supported the group financially. Through Fatah he had established contacts with Egypt's President Gamal Abd el-Nasser , who at that time was not only battling an economic crisis, but also waging war against the Yemeni King Muhammad al-Badr in order to enforce his vision of a pan-Arab state . The development of modern missiles, with which Nasser wanted to arm the Egyptian army to face Israel, devoured additional money. Nasser needed a loan of 320 million marks and asked Beidas for help. Beidas agreed, but demanded that the agreement be kept confidential. At all costs he wanted to avoid his most important customers, the Kuwaiti and Saudi ruling houses, from finding out about the loan, as both states were on friendly terms with the Yemeni king and were suspicious of Egypt's military strength and Nasser's urge for a Greater Arab state.
But the Saudi King Feisal found out about the loan agreement and so he and his friends from Kuwait and Abu Dhabi withdrew 130 million marks in one week. At the same time, the French insurance company Veritas and the Beirut branch of the Moscow Narodny Bank submitted cash checks for 40 million marks. It took Beidas more than 48 hours to provide the money. A special loan from the Lebanese central bank was overdrawn. The Presidential Palace, Prime Minister's Office and competing banks then spread the word that Intra Bank was in trouble. Investors began to panic withdraw funds from the bank, and the Lebanese central bank did not react to the incipient run . On October 14, 1966, Intra Bank officially reported its insolvency. Armed police officers had to protect the Intra Bank building from angry customers. In a hastily convened night session, the Lebanese cabinet discussed the crisis and decided on a three-day bank holiday to avoid a run on the country's other banks. While the other 92 banks in the country reopened after three days, the Intra Bank remained closed for the time being. Beidas fled to New York and died only two years later in Lucerne .
The collapse of the Intra Bank had devastating consequences for the Lebanese economy and the entire Middle East . Intra Bank at the time managed 15% of the country's total bank deposits and 38% of the bank deposits of Lebanese banks. With 156 million marks in share capital and deposits of nearly one billion marks, the Intra Bank controlled most of the country's economy. Many observers wondered why the Lebanese Central Bank, which was only founded in April 1964, did not provide the Intra Bank with liquidity. The circumstances of the bank's deep fall are still controversial today.
The surprisingly weak support of the Lebanese government under President Charles Helou was mainly attributed to the influence of the bank, which almost completely controlled the Lebanese economy, but also to the origins of Beidas, who was born in Palestine. However, Beidas' concept of borrowing callable capital from customers with low interest rates and investing it in longer-term capital with high interest rates that could not be quickly liquidated was also to blame for the bank's collapse. Most of all, he trusted in the loyalty of the customers. With the numerous investments and holdings, the bank had also taken over. Rising interest rates in Europe, Japan and the USA created an additional problem for the bank: many customers now invested their money directly in these countries and withdrew their capital from the Intra Bank, which meant an additional loss of liquidity.
The collapse of Intra Bank resulted in numerous new banking regulation laws in Lebanon.
Intra Investment Company
The collapse of the bank was followed by a major restructuring program in which the central bank and the Lebanese government became major shareholders. The new company, the Intra Investment Company, remained an important investor in the region with shares in the Middle East Airlines, the Lebanese Casino and the Lebanese investment bank “Lebanese Finance Bank”. In 2013, the Lebanese central bank held 35% of the shares in Intra, the Lebanese government 10%, the National Bank of Kuwait 4%, the government of Qatar 3% and the Lebanese investor Abdullah Tamari 14%.
Individual evidence
- ↑ a b c Secret credit In: Der Spiegel 44/1966, October 24, 1966.
- ↑ a b c d e f Burned on hot money - oil sheiks brought down the Intra Bank In: Die Zeit , 44/1966, October 28, 1966.
- ↑ Fallout of Intra Bank skulduggery haunts Lebanon still In: The National November 25, 2013 (English)
- ↑ Abdullah Tamari buys stake in Intra Investment In: Business News Lebanon April 24, 2013.