Lebanon’s Jammal Trust Bank defiant after US sanctions shock 

People walk past a branch of Jammal Trust Bank in Beirut, Lebanon, Friday, Aug. 30, 2019. (AP)
Updated 31 August 2019

Lebanon’s Jammal Trust Bank defiant after US sanctions shock 

  • The bank was placed on a list issued by the Office of Foreign Assets Control (OFAC)
  • Bank seeks to reassure customers that its funds are operating normally

BEIRUT: Lebanon’s Jammal Trust Bank (JTB) sought to reassure customers on Friday after the US Treasury Department placed the lender and its subsidiaries on a sanctions list.

A JTB official said that “the bank and its funds are operating normally and there is no fear for the fate of their money.”

The bank was placed on a list issued by the Office of Foreign Assets Control (OFAC).

The US Treasury Department accused JTB of providing financial and banking services to Hezbollah-owned institutions, including Al-Quard Al-Hassan, the Martyrs’ Foundation (Shahid), and Hezbollah’s Executive Council.

The bank stressed its strict commitment to the rules and regulations of Lebanon’s Central Bank, Banque du Liban, as well as international rules on money laundering and terrorist financing.

The governor of the Banque du Liban, Riad Salameh, said that JTB has a presence in the Lebanese Central Bank and that all legitimate deposits are guaranteed at the time of their maturity.

Prof. Jassem Ajaka, an economic and strategic expert, said that JTB is one of Lebanon’s microfinance institutions in terms of size and spread. Ajaka added that the recent US decision may be related to the detection of “suspicious operations” in 2005 and 2006 linked to JTB accounts.

The Association of Banks in Lebanon (ABL) regretted the decision to place JTB on the sanctions list, stressing that “this measure will not affect the banking sector in any way.”

ABL reassured depositors that their funds are safe with JTB, highlighting that “the Banque du Liban is capable of taking all necessary measures to address the situation.”

The banking sector is capable of absorbing the repercussions of the decision against JTB and securing the funds of depositors and rights holders.

Ali Hassan Khalil, Lebanese finance minister

Finance Minister Ali Hassan Khalil said that the banking sector is capable of absorbing the repercussions of the decision against JTB and securing the funds of depositors and rights holders.

Economist Violette Balaa said that the US decision is designed to cut off funding for Hezbollah. She said: “It is true that JTB is a small bank in Lebanon, but it was suspected of dealing with sanctioned institutions.”

Balaa said that this decision will not disturb the banking situation in Lebanon, highlighting that the sector had previously faced a similar crisis affecting Al-Madina Bank, which continued to operate at the time.

US Secretary of State Mike Pompeo said that JTB has a longstanding relationship with a major Hezbollah financial entity.

He said that JTB’s misconduct undermines the integrity of the Lebanese financial system.

Marshall Billingslea, the assistant secretary for terrorist financing in the US Department of the Treasury, said: “JTB is a primary Hezbollah banker in Lebanon, with a long and continuing history of providing an array of financial services to the terror group. JTB has tried to conceal its relationships with numerous front companies for the US-designated Martyrs Foundation.

“The malfeasance within JTB runs to the core. Hezbollah’s Member of Parliament, Amin Sherri, who engages in criminal behavior on behalf of Hezbollah, openly coordinates Hezbollah’s financial activities at the bank with its management.”

Billingslea called on the Banque du Liban to “take the appropriate steps to freeze, close, and liquidate JTB while resolving its legitimate outstanding debts to innocent account holders.”


Oil surges, stock futures slip after attack on Saudi facility

Updated 12 min 39 sec ago

Oil surges, stock futures slip after attack on Saudi facility

  • Oil prices surge on fears of global supply disruption
  • Safe haven gold, Japanese yen rise, stock futures slip

SYDNEY, Australia: Oil prices surged to six-month highs on Monday while Wall Street futures fell and safe-haven bets returned after weekend attacks on Saudi Arabia’s crude facilities knocked out more than 5% of global oil supply.
US crude futures were last up 11% at $61.10 a barrel, coming off highs on expectations other global oil suppliers would step in to lift output. Brent crude soared 13% at $68.06 after earlier rising to $71.95.
Yemen’s Iran-backed Houthi rebel group had claimed responsibility for the attack, which hit the world’s biggest oil-processing facility but a senior US official told reporters on Sunday that evidence indicated Tehran was behind it.
The attacks heightened investor worries about the geopolitical situation in the region and worsening relations between Iran and the United States.
Those fears powered safe-haven assets with prices for gold climbing 1% in early Asian trade to $1,503.09.
Moves in Asian share markets were small, however, with Japan shut for a public holiday.
MSCI’s broadest index of Asia-Pacific shares outside Japan was a tick lower at 515.4. Australian shares were down 0.1% while South Korea’s KOSPI was a tad higher.
E-Minis for the S&P 500 were off 0.4% while those for the Dow eased 0.3%.
“If risk appetite collapses due to fears of worsening middle east tensions in the wake of any retaliation to the drone attacks, some emerging markets could face a double whammy of pressures,” said Mitul Kotecha, Singapore-based senior emerging markets stratgist at TD Securities.
“In Asia, the most risk sensitive currencies are Indian rupee, Indonesian rupiah and Philippine peso .”

Bonds and currencies
Among major currencies, the Saudi news pushed the yen up 0.4% to 107.64 per dollar while the Canadian dollar rose 0.5% in anticipation of higher oil prices.
The euro was little moved near a three-week top while the pound hovered near Friday’s two-month highs. That left the greenback down 0.15% at 98.105 against a basket of six major currencies.
The risk-sensitive Australian dollar was down 0.5% against the yen, snapping nine straight days of gains. The kiwi dollar slipped to a one-week low on the yen.
“One immediate question this (attack) poses for bond markets is whether a further rise in the inflation expectations component of bond yields — which have proved historically sensitive to oil prices — will give this month’s sharp bond market sell-off fresh impetus,” Attrill added.
“Or will safe haven considerations dominate to drive yields lower? Watch this space.”
In early Asian trading, futures for US 10-year Treasury notes rose 0.3%, indicating yields may slip when cash trading begins.
Global bonds were sold off last week, sending yields higher, led by a broader risk rally on hopes the United States and China would soon end their long trade war. Better-than-expected US retail sales data also boosted sentiment.
Chinese data for industrial production, retail sales and fixed asset investment will be released later on Monday, which could help set the tone for this week’s trade.
Investors also await the outcome of the US Federal Reserve’s policy meeting on Wednesday at which it is widely expected to ease interest rates and signal its future policy path.