At around 7 a.m. one day in June last year, veteran banker Antoine Dagher left his home for one of Lebanon’s largest banks, his employer for 20 years. But the head of Byblos Bank’s ethics and anti-fraud department never arrived.
Hours later, Dagher’s wife found his body on the ground near his gray Honda near their home in Hazmiyeh, a posh suburb just minutes from downtown Beirut. He had been stabbed five times.
A year later, the unsolved murder of the father of two weighs on the once prestigious Lebanese banking industry. In a police report seen by the Financial Times, investigators said nothing was stolen, but did not identify any motives and did not charge anyone.
With no clear answers available, many bankers have drawn what they see as an inevitable conclusion: his murder is related to his job. Lebanese banks are under attack by protesters angry at their role in the country’s financial crisis and by customers unable to withdraw their money. “It was terrifying and shocking,” said one of Dagher’s former colleagues. “And so far we don’t understand anything.”
Prior to leading the bank’s ethics and anti-fraud department, Dagher headed the compliance unit at Byblos Bank for a decade.
The job of compliance bankers is to ensure that their employers comply with local and international rules on money laundering and terrorist financing. In Lebanon, “compliance is a risky business, if you do it right,” said a former regulator. The stakes are high: “You have Hezbollah [a paramilitary and political party designated a terrorist organisation by the US], you have [politicians and their families], and you have the management of corrupt banks.
An already difficult task was complicated by the country’s financial crisis, which erupted amid mass protests and a two-week bank shutdown in October 2019. Lebanon’s problems, made worse by the pandemic and a massive explosion at the Port of Beirut last year, have their roots in decades of state mismanagement and political corruption.
About 40 banks serve the 7 million inhabitants of Lebanon and many of them have invested heavily in public debt as well as the central bank. About 70 percent of total bank assets are exposed to the Lebanese sovereign, according to the World Bank. The state defaulted on its debt last year and banks have since been forced to sell their operations abroad and lay off staff as part of sweeping restructurings.
Lebanon’s gross domestic product has shrunk by more than a fifth since the onset of the crisis, and its economy has largely turned to cash. “It’s not a normal bank,” said a senior banker. “We are faced with crisis and madness. The reputation of the sector is ruined. “A Lebanese banker was a precious commodity,” said the senior banker, citing the successes of financiers in major banks abroad. But two years after the collapse, now “your name is trash”.
Disillusionment within the Lebanese banking sector is common. Although there is no capital control law, individual banks have severely restricted withdrawals and transfers. The banker in contact with the client said he must reject what he considers valid requests for access to funds, such as medical bills, while providing certain services, such as new accounts or withdrawals. , only for VIP clients or bank managers.
With financiers vilified for their role in the crisis and depositors cut off from their money, enraged customers and protesters torched bank branches and abused staff. The banker in direct contact with clients said clients had shot the managers, demanding to withdraw their own money.
Their work is now “very dirty,” said the banker in contact with the client. But employees have no choice to keep their jobs and protect their security: “We are afraid, we live in a country where there is no security, they can kill us.”
Their fear stems from the culture of impunity in Lebanon. Dagher’s murder isn’t the only one that remains unsolved. Dozens of political assassinations have gone unpunished in recent years. “The inability of justice and security forces to elucidate the killings. . . really led the public to lose faith in [their] capacity. . . to protect them, ”said Aya Majzoub, Lebanon researcher at Human Rights Watch.
Pressure also came from outside Lebanon. More banks were sanctioned as the crisis approached. In 2019, the US Treasury imposed sanctions on the Jammal Trust Bank for allegedly aiding Hezbollah – it is now in liquidation. The governor of the central bank of Lebanon is the subject of two European inquiries for money laundering and embezzlement. He denies any wrongdoing.
A severe shortage of dollars made it easier for criminals to launder money through banks, desperate for money. “It is very difficult to trace and verify the true source” of the cash, said a compliance specialist. Since the start of the crisis, “compliance is not the first priority, survival is the first priority,” said the specialist.
Byblos Bank said it had cooperated with the official investigation into Dagher’s death, but declined to answer further questions. Four bankers said Dagher was popular, known for his decency and diligence. “He was the most ethical person in the bank,” said a former colleague, adding: “If he could see what’s going on now [in the sector], I’m sure he would have resigned.
Dagher “was everyone’s favorite,” said his daughter, Michele. But Elie, her son, added: “We never realized how dangerous his job is.”