The BCCI Group, comprising the Bank of Credit and Commercial International banks and associated companies, in short known as BCCI, was conceived as an international banking organisation by Mr Agha Hasan Abedi in 1972. He was previously the founder and former President United Bank Limited, the second-largest private bank of Pakistan.
The investments made by BCCI over the years in setting up banking offices around the world and covering all the principal financial, trading and money centres globally, placed the BCCI Group in a unique position amongst all international banks.
BCCI was as a result well-positioned to service its worldwide clientele and selectively tap the growing international business through BCCI's close affinity with the world market places and the personalised services that offered to its business clients worldwide.
This had indeed placed the BCCI in an enviable position in availing business opportunities right across the globe.
1972
The first bank to be established was the Bank of Credit and Commerce International S.A. ("BCCI SA", also referred to as BCCI) in Luxembourg in 1972 with one branch each in Luxembourg, the United Arab Emirates and the United Kingdom.
Its initial paid-up capital of $2.5 million was subscribed by Bank of America (25% later increased to 30%) and the balance by investors from the Middle East, principally the Ruler of Abu Dhabi, United Arab Emirates.
Between 1972 and the end of 1974, the BCCI network was expanded in the Middle East and the United Kingdom through the addition of seven branches in the United Arab Emirates, one branch in the Sultanate of Oman and five branches in the United Kingdom.
1973
In 1973, a 35% interest was acquired in National Bank of Oman Limited (S.A.O.) in the Sultanate of Oman, which was subsequently reduced to 29% and an 80% interest was acquired "in Banque Chartouni, Lebanon, which was re-named Bank of Credit and Commerce International (Lebanon) S.A.L. and in 1977 became a wholly-owned subsidiary.
In order to establish a presence in the Far East, BCCI Finance International Limited, a finance company, was established in Hong Kong in 1973.
1974
In December 1974, the BCCI Group was restructured with the establishment of BCCI Holdings (Luxembourg) S.A. which in 1975 acquired BCCI, its subsidiaries, Bank of Credit and Commerce International (Lebanon) S.A.L. and BCCI Finance International Limited, and its investment in National Bank of Oman Limited (S.A.O.)
1975 to1980
The next period of expansion was between 1975 and 1980 with the establishment of Bank of Credit and Commerce International (Overseas) Limited ("BCCI Overseas", also referred to as BCCI) in the Cayman Islands. During this period, BCCI Overseas opened branches in Egypt, Sudan, Bangladesh, France, Kenya, Sierra Leone, South Korea, Pakistan, Gabon, Ivory Coast, Liberia, Sri Lanka, Togo and Senegal.
Meanwhile, BCCI established branches in Mauritius, North Yemen, Jordan, West Germany, Sudan, Djibouti, Seychelles, Oman and Bahrain.
During the same period, the following companies were established or acquired: Kuwait International Finance Company S.A.K. (49%); BCCI Canada Inc. (50%); Premier Bank Limited, Ghana (45%) and renamed Bank of Credit and Commerce Ghana Limited; Bank of Credit and Commerce International (Swaziland) Limited (55%); Bank of Credit and Commerce International (Nigeria) Limited (40%); Hong Kong Metropolitan Bank Limited (97%) (subsequently increased to 99%), and renamed Bank of Credit and Commerce Hong Kong Limited, and Credit and Finance Corporation Limited, the Cayman Islands (100%). In 1976 a 55% shareholding was acquired in Banque de Commerce et de Placements S.A. in Geneva which was increased to 70% in 1979 (this shareholding was reduced in 1983 to 20%, with subsequent reduction to 15% in 1987) to comply with Swiss regulations relating to agreements of reciprocity between Switzerland and the places of residence of the shareholders of the BCCI Group.
Some re-alignments of branches were also made; branches of BCCI operating in the Sultanate of Oman were transferred to Overseas and branches of BCCI Overseas in Egypt were transferred to a new joint venture bank, Bank of Credit and Commerce (Misr) S.A.E. (49%), which was established with the participation of Egyptian investors.
1980 Bank of America
The purpose of Bank of America's investment in establishing BCCI in 1972 was to have access to the Middle East market before the petrodollar exposition changes the landscape.
In due course, Bank of America determined that its strategic interests in the area required a direct presence. At the same time, the BCCI Group wished to undertake banking operations within the USA while Bank of America was a shareholder and there was likely to be competing interests with BCCI also have a significant presence in the USA.
Therefore, by mutual agreement, Bank of America divested its shareholding by June 1980 and went on to establish its own branches in the Middle East.
1981
From 1981 onwards, BCCI SA and Overseas opened branches in the Philippines, Panama, Jamaica, Macau, Cyprus, Turkey, Monaco, the Maldives, India, Barbados and the Bahamas. Agencies were also established in the states of California and Florida in the United States.
Representative offices of BCCI Overseas were opened in Beijing and Guangzhou in the People's Republic of China.
The following subsidiaries and affiliates were also established: Bank of Credit and Commerce Zimbabwe Limited (53%), Bank of Credit and Commerce (Zambia) Limited (100%), Italfinance International S.p.A. (85%), Bank of Credit and Commerce Cameroon S.A. (65%), Bank of Credit and Commerce (Botswana) Limited (100%), BCCI Leasing (Malaysia) Sdn Bhd (49%), BCC Credit and Finance (Uruguay) S.A. (100%) and Bank of Credit and Commerce (Emirates) (40%) to which were transferred existing branches of BCCI Overseas in the United Arab Emirates.
During 1981, Bank of Credit and Commerce Canada was established as a wholly-owned subsidiary of BCCI SA, into which was merged BCCI Canada Inc.
1983 to 1984
In 1983 and 1984 interests were also acquired in three existing commercial banks; Banco Mercantil (49%) in Colombia, Banco de Descuento S.A. (99%) and renamed Bank of Credit and Commerce S.A. Espanola in Spain, and Bank of Credit and Commerce (Gibraltar) Ltd.(100%) formerly Citibank Ltd.
In October 1983, BCCI was authorised to establish an agency in New York.
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1985
Events of major significance during 1985 were the active start-up of Shenzen·branch in the People's Republic of China, the acquisition of a minority interest in Banco Finamerica (30%) in Argentina (subsequently increased to 99%), the acquisition of a further 11% interest in the share, capital of National Bank of Oman (40%) and the increase of group shareholding in. Banco de Credito y Comercio de Colombia from 49% to 99% (formerly Banco Mercantil).
1985 continued to reflect the policy of consolidation.
1986
The BCC Group, having achieved its planned target of global coverage did not significantly increase its geographical or branch position, but an investment banking licence was acquired in Trinidad and Tobago and a full branch operation was started in Australia.
In Brazil, an investment Banking Licence was acquired and a local affiliated company in which the group had a 50% interest was incorporated to utilize the licence.
1987
During 1987, Italfinance became a wholly owned subsidiary of BCCI and the shareholding in BCC Ghana increased to 55%.
1991 BCCI closure
BCCI was abruptly shut down on 5 July 1991 due to the taken decision by western central banks (the College of Regulators of BCCI).
This decision was made notwithstanding that the Government of Abu Dhabi and its related institutions were the majority shareholders in BCCI at the time and the Government had already reaffirmed their commitment to maintain BCCI's capital base, and to a restructuring programme.
The governments in some countries did not shutdown BCCI and its branches, subsidiaries and affiliates continue to operate under other names.
The BCCI Group majority shareholders considered the abrupt action by western central banks to shut down BCCI in 1991 was unjustified when they already had detailed discussions with the Bank of England and other regulators on a restructuring plan and would have injected further capital, if required.
In a 24-page report not made public but sent to some 60 central bankers worldwide, the United Nations Center on Transnational Corporations said that by simply shutting down the 70-nation banking network that financed international trade of $18 billion a year, the economic damage fell hardest on countries like Nigeria, Bangladesh and Zambia, where B.C.C.I. was an important institution. (New York Times, Feb 5, 1992)