asked on a regular basis by Egypt and Sudan to open large credit lines, requests that were often left to European directors to refuse.

In June 1979, Eurab assets were composed of three blocks of comparable size: trade finance instruments, such as documentary credits, acceptances and promissory notes; medium- term roll-over loans; and interbank loans. By then the bank had reached a considerable size: turnover had risen to US$1.25 billion, which made it one of the largest bank joint ventures between Europe and the Arab world.

In 1980, the bank enjoyed a boom year, with the balance sheet rising 20 percent from 1979, and profits more than doubling to US$8.5 million. For the Eurab group, 60 percent of business came from the Brussels subsidiary (US$1.19 billion), 16 percent from London (US$313 million), 10 percent from Frankfurt (US$191 million) and 14 percent from the Bahrain branch (US$290 million). The Bahrain branch, however, posted higher profitability due to the favourable tax situation there.

Assets were divided into two distinct blocks. Short-term deposits with banks represented 47 percent of the total, at US$900 million. The remaining 53 percent were loans and advances, totalling US$1,100 million. Half of this amount was outstanding on the markets in Arab countries. Documentary credits in favour of European exporters working with Egypt, Libya, Algeria, Morocco, the Kingdom of Saudi Arabia and Syria alone amounted to US$300 million. However, major loans had also been granted outside the region, mainly to countries in Latin America, such as Argentina, Chile, Mexico and Venezuela.

Richard Alloo saw, however, major weaknesses in the existing organisation. The main drawback in his view was securing agreement between Western and Arab directors, both from a leadership and management point of view. There are obvious psychological differences between the two worlds and it takes great care and diplomacy, he wrote at the time. Politics also played a major role in the destiny of Eurab, which was by then feeling the knock-on effects of the tensions between Egypt and the Arab world following the signing of the Egypt-Israel peace treaty on the 26 March 1979. The rise of armed conflicts in the Middle East acted as a brake on the bank s expansion in the region over the following years.

A further frustration was an apparent lack of support for the business from some Arab shareholders, especially in the form of deposits. Apart from a number of commercial banks, mainly in Sudan and Jordan, very few Arab institutions had deposited funds with Eurab. Richard Alloo explained: We fund our operations in the inter-bank market, where the name of Eurab is readily accepted. Paul Emmanuel Janssen, a board director and member of the executive board of Société Générale de Banque, underlined the problem: Originally we had hoped to see funds deposited by our Arab partners and to make international loans outside the Arab world. These hopes have met with disappointment and today the actual situation is the very opposite.

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