Intra Bank

Intra Bank ( also Banque Intra, Arabic بنك انترا ) was a Lebanese bank and to its collapse in 1966 one of the largest financial institutions in the Middle East.

History

Birth and ascent

The bank was founded in 1951 by Yousef Beidas and three partners as a trading company " International Traders " ( telex address: Intra) founded because there was no German Banking Act in Lebanon. The company started as a money changer and as a trading company for the Ford, the office equipment manufacturer Facit and other international companies. International Traders quickly rose to become the leading money exchange institution of Beirut and many wealthy Lebanese were still in the 1950s, customers of forex trading intra. Soon the oil-producing countries of Arabia were among the clients ( 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 stores in New York, London, Paris, Geneva, Frankfurt, Rome, Brazil and North and West Africa.

The Bank invested soon worldwide, owned real estate in New York and Paris, and was co-owner of the Beirut port company, several luxury hotels in Lebanon and majority owner of Middle East Airlines. In France, the Bank had 80 % of the shares of a shipyard in La Ciotat, near Toulon. On the Avenue des Champs- Élysées in Paris intra bank had purchased a 6000 -square-meter plot of land for 70 million marks, on which he was to be built a glass office palace with cinema and swimming pool. In Belgium, the bank had acquired a majority stake in the " Société Chimique de Pont Brûle ". In addition, the Company had with the Atlas - Fund a separate investment fund which invested exclusively in U.S. securities.

Total assets amounted to 1965 925.4 million Lebanese pounds (about 1.4 billion U.S. $). The deposits accounted for about 745 million pounds, of which 305 million are said to have been present and cash equivalents, 352.1 million were borrowed as loans. The paid up capital amounted to 60 million pounds, it should have been doubled shortly before the crisis to 120 million. The reserves were at 18.3 million, however, very low.

Collapse

Intra - bank - founder Beidas had fled to the state of Israel from Jerusalem in 1948. The Palestinians therefore strongly sympathized with Fatah, who wanted to destroy the state of Israel, and supported the group financially. About Fatah, he had established contacts with Egypt's President Gamal Abdel Nasser, who had not only to fight at this time against an economic crisis, but also war against the Yemeni King Muhammad al- Badr led to enforce his idea of ​​a pan-Arab state. The development of modern rockets, with which Nasser wanted to upgrade the Egyptian army in order to fight against Israel, devoured extra money. Nasser took a loan of 320 million marks and asked Beidas for help. Beidas agreed, but demanded a confidentiality agreement. He wanted to avoid that its main customers, the Kuwaiti and the Saudi ruling family, learned of the credit, as both countries were the Yemeni king on friendly and Egypt's military strength and the urge Nasser after a large Arab state eyed with suspicion under all circumstances.

But the Saudi King Faisal learned of the credit agreement and so he and the fellow emirs of Kuwait and Abu Dhabi in a week 130 million from Mark. At the same time, the French insurance company Veritas and the Beirut branch of the Moscow Narodny Bank cashier's checks submitted more than 40 million marks. Beidas took more than 48 hours to make the money available. A special credit of the Lebanese Central Bank was overdrawn. The Presidential Palace, the office of the Prime Minister and competing banks spread out that the intra bank was in trouble. Investors began to panic taking money from the bank and the Lebanese Central Bank did not respond to the incipient Run. On October 14, 1966, the Intra Bank announced officially their inability to pay. Armed police had to protect the bank building the intra bench in front of upset customers. In a hastily convened meeting night advised the Lebanese Cabinet on the crisis and agreed on a three-day bank holiday to prevent a run on other banks in the country. While the other 92 banks in the country reopened after three days, the Intra Bank was initially closed. Beidas fled to New York, and died in Lucerne, only two years later.

The collapse of Intra Bank had a devastating impact on the Lebanese economy and the entire Middle East. The intra bank managed at this time 15 % of the total bank deposits in the country and 38 % of bank deposits of Lebanese banks. With 156 million Mark 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 had only been founded in April 1964, the Intra Bank not supplied with liquidity. The circumstances of the deep fall of the bank are still controversial.

The surprisingly weak support of the Lebanese government under President Charles Helou was attributed mainly to the influence of the bank, the Lebanese economy almost completely controlled, but also the origin of the Palestine -born Beidas. But blame for the collapse of the bank was also Beidas ' concept to borrow short-term callable chapter of customers with low interest rates and invest in longer-term section with high interest rates, which could not be re- liquidate quickly. He trusted in probably mainly due to the de loyalty customers. With the numerous investments and equity investments, the Bank had taken over as well. An additional problem was preparing the bank, rising interest rates in Europe, Japan and the United States, many customers put their money now directly in these countries and withdrew their capital from the Intra Bank, which provides an additional loss of liquidity meant.

The collapse of Intra Bank had numerous new laws to bank regulation in Lebanon result.

Intra Investment Company

The collapse of the bank followed a comprehensive restructuring program, in the course of which the Central Bank and the Lebanese government were the main shareholder. The new company, the Intra Investment Company, remained major investor in the region with interests in the Middle East Airlines, Lebanon, the casino and the Lebanese investment bank, " Lebanese Finance Bank ". 2013 held the Lebanese Central Bank 35 % of the shares in Intra, the Lebanese government 10%, the National Bank of Kuwait 4%, the Government of Qatar and 3% of the Lebanese investor Abdullah Tamari 14%.