x Abu Dhabi, UAEWednesday 17 January 2018

Lebanese banking: cigarettes, scary men and cold cash

I want to tell you all how much I love the new branch of HSBC that has opened at the top of my street in the East Beirut neighbourhood of Ashrafieh.

At the risk of sounding like I have been handed a huge wedge of cash to write this - I haven't - I want to tell you all how much I love the new branch of the Hong Kong and Shanghai Banking Corporation (HSBC) that has opened at the top of my street in the East Beirut neighbourhood of Ashrafieh. For six months, I watched like an excited child as it evolved from a concrete shell on the ground floor of a mixed-use development into a handsomely liveried unit. What I didn't count on were the courtesy espressos, the comfy sofas, the copies of Time, Newsweek and National Geographic - no doubt to reinforce HSBC's global identity - and, get this, two phone booths that allow me to conduct business with an HSBC employee (in Lebanon, not Mumbai) at any time of day.

A banner on the bank's Lebanon website boasts of the new "location" by showing us two Lebanese women, both from Beirut central casting - the gym-going, latte-drinking, shopaholic housewife, and what I can only describe as her bridge-playing, matchmaking mother - and both positively quivering at the prospect of this new banking experience. It was never always thus. Modern retail banking in Lebanon has always played second fiddle to safe haven banking and government lending banking. But we are catching up. Banks, especially the top 10 - BLOM, Byblos, Audi and the rest - now all espouse "core values", promote environmental awareness and are big on corporate social responsibility (CSR), which in Lebanon means financing a nose job.

But when I arrived in Lebanon in January 1992, the country was beginning a hangover brought on by 15 years of sectarian bloodshed. Internet and e-mail were still the stuff of science fiction, while mobile phones were mobile only if you were prepared to lug around several kilograms of equipment, which, when you got a signal, routed you through New York via Cyprus and cost more to run than a warlord's security detail.

Then there was the money. Although the central bank governor Edmond Naim had literally lived in the bank, protecting Lebanon's gold reserves from marauding militias, he had been unable to stop catastrophic inflation. The day I arrived in Beirut, the Lebanese pound was at 800 to the dollar - 100 times cheaper than it had been in 1984 - and the central bank was still reeling. On my first night, I was part of a group invited to dinner by the late great Salim Salam, the chairman of Middle East Airlines. We went to Ajami on Ramlet el Baida, then one of the few places one could eat in relative security (the valet parkers were armed). I can't remember much about the evening, except that when the cheque arrived, "Salim Beyk", resplendent in his trademark golfers' cap and Churchill double corona, motioned to his driver to do the honours.

Today, a wafer-thin platinum card would be whipped out, perhaps from a Johnny Farah wallet made from hand-tooled distressed ostrich, but back then the young man delved into the pockets of his bomber jacket and pulled out three thundering wads of 1,000 lira bills, then the highest denomination. We sat sipping our coffee, watching the staff flipping through the bills with practised dexterity. "Don't worry," said one diner. The Lebanese lira will never reach 1,000 to the dollar. "We will never allow it."

But by May someone did, and not long after, the government of Omar Karami, the prime minister, was toppled by tyre-burning crowds. Things didn't get better in the next administration headed by Rashid el Solh, and by October the lira was nudging 3,000 to the dollar. Enter Rafik Hariri, the buccaneering billionaire with blue-chip Saudi connections. Overnight, the lira parachuted down to 1,500 to the dollar, where amazingly it has stayed, albeit now lashed to the US dollar's mast. A year later, we all breathed a sigh of relief with the arrival of the first 10,000 lira notes. The 5,000, 20,000, 50,000 and 100,000 lira bills followed in 1994. Wallets were once again in fashion.

But back in 1992, many people were carrying money around in bags, and it was in this climate that I opened my first Lebanese bank account at the then magnificently named British Bank of the Middle East - now HSBC - just off Hamra Street. Withdrawing money was something of a mission. Anyone who has ever tried to negotiate a standby seat at Athens International Airport will have some idea what I am talking about. With Beirut still something of a Wild West town, all transactions required at least three signatures, provided by a trio of chain-smoking bank officers, a process made all the more fraught given that the concept of queuing was simply non-existent. Brothers, cousins and friends, or simply scary-looking men in whose minds the war had not ended, all seemed to be ahead of me in the line of life.

In the late autumn of 1992, I crashed my girlfriend's car. Her family were not impressed, but were partially mollified when I offered to fix it. Insurance? Don't make me laugh. Ali, my mechanic, charged me US$700 or 1.05 million liras, and so off I trudged to the bank, where I was told that there was a run on 1,000 lira notes. Would I mind my money in 250s? Did I have a choice? No. I emptied my brief case and stuffed the bills inside. The whole bank was staring it at. Only the scary men seemed to be carrying "normal" size wads of 1,000 lira notes that seemed to have appeared out of nowhere.

I fixed the car and married the girl. We now have a joint account. Michael Karam is a freelance PR and media consultant based in Beirut @Email:business@thenational.ae