The following political and macroeconomic conditions stood out particularly in 2017 within the international and regional context in which our bank operates:


1. In Europe, the Brexit process initiated by the United Kingdom, the outcome of which remains uncertain. The Bank of England raised its interest rate from 0.25% to 0.50% to calm down the inflation, economic growth rate receded to 1.7% in 2017 and OECD has revised its forecasts downward for the next two years, considering the Brexit as the “major risk” for the United Kingdom.

2. In the Middle East, the exacerbation of the Syrian conflict and the political unrest in Lebanon. In the Gulf region, particularly in the UAE, the economy did stagnate in 2017, showing a sliding inflation of 2.7% at the end of December.

The GDP growth rate was faint at 1.3%, however the International Financial Institute expects the growth to reach 3% in 2018.

3. The volatility of the euro / foreign currencies exchange rate that affected our total balance sheet by about 10% and our net results by about 8%.


In this challenging environment, BLOM BANK FRANCE has increased its operating income (excluding exceptional results and net provisions) by 17.68% and 13.30% on statutory and consolidated basis respectively. Our bank stands as a haven of security towards our customers of Middle-Eastern origin, as reflected by the increase by over 8% of our customers’ deposits in EURO on statutory basis despite the EUR/USD rate impact.


The consolidated balance sheet reveals total footings of EUR 2229 million compared to EUR 2409 million at the end of 2016.


Customer loans dropped by 8.52% to EUR 678 million compared to EUR 742 million at the end of 2016. The bonds portfolio amounted to EUR 138 million compared to EUR 192 million in 2016.


Customer deposits dropped by 3.06% to EUR 1654 million compared to EUR 1706 million in 2016. Taking into account the fiduciary deposits of BLOM BANK Switzerland, which are not included in the aforementioned figures, as well as securities that are managed by BLOM BANK Switzerland in addition to BLOM BANK FRANCE, the total customer funds amounted to EUR 2644 million compared to EUR 2545 million at end 2016.


As previously mentioned, our fundamentals are sound; thus, Basel 3 solvency ratio calculated on a consolidated basis stood at 33.04%, which is more than the minimum required of 11.75% as from June 30th, 2018 and 12.375% in 2019.


Concerning liquidity, liabilities towards customers represented only 41.02% of customer deposits (and 37.01 % of total deposits).


The net banking income dropped by 2.72% to EUR 57.09 million in 2017, compared to EUR 58.71 million in 2016.


General operating expenses (administrative and staff expenses, including taxes, etc.) increased by 2.52% to EUR 30.29 million.


Depreciation expenses and provisions for tangible and intangible fixed assets amounted to EUR 2.31 million in 2017 (EUR 2.01 million in 2016).


Net provisions amounted to EUR 1.20 million at end of 2017 compared to EUR 1.21 million at end 2016.


Gross operating income (after amortization, but before taxes, provisions on debts and exceptional results) amounted to EUR 24.41 million compared to EUR 27.16 million in 2016.


The consolidated profit for 2017 decreased by 8.99%, amounting to EUR 17 702 966.35 in comparison to EUR 19 450 725.69 in 2016.


At the end of 2017, the consolidated equity (excluding general provisions) amounted to EUR 356.8 million, after the integration of the year’s profit and before dividend distribution.


Our parent Bank, BLOM BANK SAL, which currently holds more than 99% of our shares, achieved solid growth throughout the financial year 2017: shareholders’ equity as well as profitability are on the rise.


The main consolidated financial highlights of our parent entity, BLOM BANK SAL, for 2017 are as follows:

- Total assets stood to USD 32.54 billion at the end of 2017 compared to USD 29.52 billion in 2016.

- Customer loans reached USD 7.54 billion against USD 7.16 billion in 2016.

- Customer deposits reached USD 26.64 billion in 2017 against USD 24.81 billion at end 2016.

- Net profits reached USD 485 million compared to USD 463 million at the end of 2016.

- Net equity reached USD 3.01 billion compared to USD 2.93 billion in 2016.


The international economic situation as well as the regional prospects call for the cautiousness and the vigilance that will continue to guide our actions and our options in 2018.


Building on the sound fundamentals that our solvency and liquidity ratios show as well as on future prospects with regard to selective opportunities offered by the Romanian market and the UAE market in particular, our target for 2018 is to maintain our net results at 2017 level on the consolidated basis and increase by 10% our results on statutory basis.


Therefore, our business model, based on our decision to maintain liquidity surpluses in order to confidently face the potential macroeconomic and geopolitical difficulties, will allow us to take advantage of the rise of USD interest rates expected in 2018.