Created in 1863, following a shareholder agreement between the Ottoman government and British and French investors, including the Comptoir national d’escompte de Paris (CNEP), the Ottoman Imperial Bank was granted for thirty years the exclusive privilege of issuing banknotes and securities on the territory of the Ottoman Empire. It was an important lever for the development of the country’s wealth and the financing of infrastructure essential to its modernization.
In 1893, to improve connections between Beirut and the main Syrian cities, the Ottoman Imperial Bank became interested in the construction of a railway line initially linking Beirut to Damascus, and later extended to Homs, Hamah and Aleppo. The Comptoir national d’escompte de Paris and the Banque de Paris et des Pays-Bas, the forerunners banks of BNP Paribas, actively participated in the construction of the Damascus-Hamah railway line through various financial operations and the latter’s entry into the capital of the Ottoman Bank in 1920. Their role became even more decisive with the creation in 1919 of the Bank of Syria and Lebanon (BSL), a subsidiary of the Ottoman Bank.
The Bank of Syria and Lebanon (1919-1970)
The Bank of Syria and Lebanon was a strategic point of support for French economic interests in the region. It was born out of France’s desire to create a French bank in Syria, to which could subsequently be entrusted the issuance of banknotes in Syria and Lebanon, countries under French influence via a mandate granted by the League of Nations in 1920. Indeed, the Ottoman Imperial Bank, which had this power before the war, could no longer exercise this privilege in the regions detached from the Ottoman Empire after the First World War because of its nationality.
On the strength of this observation, the Ottoman Imperial Bank established a subsidiary in 1919 to take over from the Ottoman Empire in the Levant. The Bank of Syria, established as a French limited company, with 94.45% of its capital subscribed by the Ottoman Imperial Bank, set up offices in Beirut and Marseilles, and the French government formally granted it the privilege of issuing shares for the whole of Syria.
In 1924, at the time of the renewal of its issuing privilege, the Bank of Syria took the name of Bank of Syria and Greater Lebanon, while the Ottoman Bank sold part of its shares to Syrian and Lebanese personalities.
Role of the Bank of Syria and Lebanon in the financing of railway infrastructure
In the field of public works, the Bank of Syria and Lebanon was very active. During the 1920s, it granted loans to the municipalities of Beirut and Damascus: roads and rail networks were developed and extended with its assistance.
Find out more : Financing the Beirut-Damascus railway