Bank Audi sal : Information Statement relating to the Ordinary General Assembly Meeting.

BANK AUDI S.A.L.

Bab Idriss - Omar Daouk Street

Bank Audi Plaza, P.O. Box 11-2560

Beirut - Lebanon

INFORMATION STATEMENT

August 17, 2020

Dear Global Depositary Receipt Holder:

Reference is hereby made to the Amended and Restated Deposit Agreement dated February 25, 2019 (as may be amended from time to time, the "Deposit Agreement") between Bank Audi s.a.l. (the "Bank")) and Bank of New York Mellon, in its capacity as depositary (the "Depositary"), relating to Global Depositary Receipts issued in respect of common shares of the Bank (the "GDRs"), each GDR representing one common share, nominal value L.L. 1,670 per common share (the "Common Shares"). Capitalized terms used herein without otherwise being defined shall have the respective meanings assigned thereto in the Deposit Agreement.

The Depositary, as the shareholder of record of Common Shares evidenced by GDRs, has received notice of the Ordinary General Meeting of the Shareholders of the Bank to be held on September 04, 2020 (the "General Meeting"), at the Bank's head office in Beirut, which (among other things) sets forth the agenda for such General Meeting. References in this Information Statement (this "Information Statement") to the "Holder" of any GDR shall mean the person registered as the holder of such GDR on the books of the Depositary. In accordance with Section 5 of the Deposit Agreement, a copy of such notice and agenda is being sent hereby to each person who is a Holder on August 17, 2020, which is the record date (the "Record Date") established by the Depositary for this purpose (which is as near as practicable to September 3, 2020, being the corresponding record date set by the Bank in respect of the General Meeting).

As set forth in such notice, at the General Meeting, shareholders of the Bank, including the Depositary, will be asked to consider and vote upon the following agenda:

1. To approve the Bank's accounts, in particular, the balance sheet and the profit and loss statement, as of and for the year ended December 31, 2019, and to discharge the Chairman and members of the Board of Directors of the Bank in respect of activities performed during the year ended December 31, 2019;
2. To approve the allocation of the 2019 annual results as proposed by the Board of Directors, and to authorize the transfer of other amounts to retained earnings, or to other reserve accounts;
3. To ratify loans granted during the year 2019 to related parties as per Article 152 of the Code of Money and Credit;
4. To authorize the granting of loans to related parties during the year 2020, in accordance with Article 152 of the Code of Money and Credit;
5. To ratify transactions that are subject to the approval of the General Meeting including transactions entered into between the Bank and members of the Board of Directors or other related persons or affiliated companies during the year ended December 31, 2019 that are subject to Article 158 of the Code of Commerce and to authorise the Bank to enter into similar transactions during the year 2020;
6. To approve the acquisition of all the assets and the assumption of all the liabilities of Audi Investment Bank sal pursuant to law 192/1993;
7. To approve the acquisition of all the assets and the assumption of all the liabilities of Audi Private Bank sal pursuant to law 192/1993;
8. To elect a new member of the Board of Directors;
9. To determine the remuneration of Board members who have managerial responsibilities, and to determine the remuneration and attendance fees of the other members of the Board;
10. To authorise the participation of certain Board members and senior executives in the boards of other similar companies and to grant the necessary related authorisations pursuant to Article 159 of the Code of Commerce; and
11. To determine the fees of the external auditors for the year 2020.

Each Holder is hereby requested to return to the Depositary voting instructions, as provided in this Information Statement, by which such Holder may give instructions to the Depositary to vote for or against each and any resolution specified in such agenda.

After careful consideration, the Board of Directors recommends a vote in favour of each such resolution.

Yours very truly,

Samir Hanna

Chairman - General Manager

Bank Audi

INFORMATION STATEMENT

Table of Contents

Page

AVAILABLE INFORMATION……………………………………………………………………………………………………………3

VOTING RIGHTS OF HOLDERS………………………………………………………………….……………………………………3

SUMMARY BACKGROUND INFORMATION……………………………………………………………………………………3

VOTING INSTRUCTIONS……………………………………………………………………………………………………………..…7

INFORMATION REGARDING BANK AUDI S.A.L……………………………………………………………………….…….8

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AVAILABLE INFORMATION

No person has been authorized to give any information or to make any representation other than those contained in this Information Statement, and, if given or made, such information or representation must not be relied upon as having been authorized by the Bank. No delivery of this Information Statement nor any offer or distribution of any securities to which this Information Statement relates shall, under any circumstances, create any implication that there has been no change in the affairs of the Bank since the date of this Information Statement or that any information contained or referred to herein is correct as of any time subsequent to the date as of which it is given. This Information Statement does not constitute the solicitation of a proxy to or from any person in any jurisdiction to or from whom it is unlawful to make such offer or solicitation within such jurisdiction.

VOTING RIGHTS OF HOLDERS

In accordance with Section 5 of the GDRs, the Depositary is seeking voting instructions from the Holders in order to exercise or cause to be exercised the voting rights in respect of the Deposited Shares as directed by such voting instructions to the extent permitted by Lebanese Law.

Common Shares which have been withdrawn from the deposit facility under the Deposit Agreement and transferred on the Bank's register of members to a person other than the Depositary or its nominee may be voted by the registered owner thereof; however, Holders may not receive sufficient advance notice of the General Meeting to enable them to withdraw Deposited Shares and vote at the General Meeting.

SUMMARY BACKGROUND INFORMATION

On July 29, 2020, the Board of Directors of the Bank (the "Board of Directors" or the "Board"),

1. Having examined the draft External Auditors report to the General Meeting in connection with the financial statements as of and for the year ended December 31, 2019, encompassing the External Auditors adverse opinion;
2. Having, in consideration of
3. • the fact that the External Auditors adverse opinion has been prompted by the impossibility to assess, reliably and accurately, the impact of the prevailing Lebanese crisis on the Bank's financial statements, within the excessive uncertainties characterizing the challenging environment, and the absence of an adopted and clear national fiscal and economic recovery plan;
   • the notes to the Consolidated Financial Statements, notably Note 1 describing the Macroeconomic and the Regulatory environment and the particular situation of the Group, and
   • the other notes to the Consolidated Financial Statements;

resolved to approve the financial statements;

1. Having adopted the 2019 Annual Report encompassing the "Management Discussion and Analysis", which summarises the Bank's activity during the year ended December 31, 2019 (and its major financial indicators), as well as the major developments in the local and regional economies and the Bank's market positioning and strategic choices;
2. Having adopted a proposal to transfer the results (loss) of the year 2019 to the Retained Earnings account, and to transfer certain other amounts to retained earnings, to reserve appropriated to capital increase, or to reserve for foreclosed assets, as the case may be, all pursuant to the relevant circulars or memos of the Lebanese Banking Control Commission ("BCC") as detailed below:

Amounts in 000s of LBP

Transfer from "Reserve for unrealized profit on financial assets held at Fair	48,943,127
Value Through Profit and Loss" to "Retained Earnings" pursuant to BCC
circular number 296
Transfer from "Reserve for foreclosed assets" to "Reserve appropriated to	1,768,885
capital increase" pursuant to BCC circular number 267
Increase "Reserve appropriated to capital increase" following the sale of	9,648
foreclosed assets pursuant to BCC circular number 267
Transfer from "General Reserve" to "Reserve for foreclosed assets" pursuant	12,177,873
to BCC Memo number 10/2008
Transfer from "General reserve" and "other Distributable reserves" to	97,946,736
"retained earnings"
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Transfer the results for the current year (Loss of 2019) " to retained earnings"	1,554,380,861

1. Having examined the draft External Auditors special reports in connection with outstanding loans to related parties subject to Article 152 of the Code of Money and Credit ("Article 152 Loans") pursuant to which the External Auditors confirmed that loans granted by the Company to related parties during the year ended December 31, 2019 are within applicable legal and regulatory ceilings, and having thus adopted a proposal to ratify the "Article 152 Loans" granted during 2019 as shown in the following table:

Loans to related parties		Amounts in billions of LL
(as per Article 152 of the Lebanese Code of Money and Credit)
Total Gross Amount	47.6
Out of which	10.8	Covered by cash collateral in the same currency
		as the related loan

Total Amount net of cash collateral

Out of which

Total Amount net of cash collateral, housing loans and car loans

Out of which

Total Net Amount of loans to related parties

36.8

22.9 Housing loans covered by first degree mortgages on independently evaluated homes and bearing terms and conditions that are in line with the industry practice and compliant with applicable regulations.

0.4 Car loans covered by liens on independently evaluated cars and bearing terms and conditions that are in line with the industry practice and compliant with applicable regulations.

13.5

7.2 Covered by real estate mortgages with a sufficient coverage in compliance with applicable regulation and market practice.

6.3 Approved by the Board and granted to Senior managers or executive directors (none of whom is one of the non-executive members of the Board).

1. Having, in consideration of the concurrence of the Audit Committee, adopted a proposal to:
2. • approve the granting, within applicable regulatory ceilings, of loans to parties that are subject to Article 152 of the Code of Money and Credit during the year 2020, aggregating LL 10.4 billion to the following persons:

			billions of LL
Beneficiary	Against Real	Without Real	Total
	Estate collateral	Estate collateral
Samir Hanna	6.0	-	6.0
Chairman & Group Chief
Executive Officer

Chahdan Jebeyli

Group Chief Legal and

Compliance Officer

Marc Audi

Executive Board Member

Jardin Agrodis

A company affiliated to FRH Investment Holding sal, a 12.25% shareholder of the Bank

-	0.2	0.2
-	0.3	0.3
-	0.9	0.9

Other executives	-	3.0	3.0
Total	6.0	4.4	10.4

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and

1. • delegate to the Board the necessary authority to grant such parties (persons that are subject to Article 152 of the Code of Money and Credit) Housing Loans, Car Loans, and Charge Cards (to the extent they abide by the provisions of Article 7 bis of BDL circular 132) as well as facilities against same currency Cash Collateral, and Facilities against same currency Bank Guarantees (to the extent they abide by the provision of Article 8 of BDL circular 132);
2. Having examined the draft External Auditors special reports in connection with Article 158 of the Code of Commerce, pursuant to which the External Auditors did not express any remarks in connection with transactions entered into between the Bank and members of the Board of Directors and other related parties or affiliated companies, and having adopted a proposal to ratify such transactions entered into during 2019 (by virtue of the authorization granted by the general meeting of shareholders on 12 April 2019, and pursuant to Article 158 of the Code of Commerce), such transactions encompassing, in essence (after deduction of dealings with Consolidated Banks, Financial institutions, or Subsidiaries), the following transactions, all of which entered into at arm's length and duly approved by the Board of Directors:
3. • Cash contributions to "PinPay s.a.l" (a provider of payment solutions to Bank Audi and to other Lebanese banks and that is 24.41% owned by Bank Audi) aggregating LL 1.4 billion and allocated to the capital increase of "PinPay s.a.l.";
   • Donation to a cultural foundation bearing the Bank's name (the "Audi Foundation") whose managing board comprises a number of the Bank's Directors and executives, for LL 0.2 billion;
   • And other miscellaneous transactions including the receipt of services for LL 0.15 billion, the receipt of commission and fees for LL 2.3 billion and the acquisition of fixed assets for LL 0.53 billion;
4. Having adopted a proposal to authorize the Bank to enter into similar transactions during 2020;
5. Having resolved to revisit the business model of certain subsidiaries as a result of the deterioration of the Lebanese macro environment, and having:
6. • In consideration of:
   • 1. The significant reduction in the volume of activities of Audi Investment Bank sal ("AIB") a fully owned subsidiary of the Bank offering specialized services focused on investment banking and long term financing, with total Assets aggregating LL 445 Billion, total liabilities aggregating LL 4 Billion and total equity aggregating LL 441 Billion as at 31 December 2019;

1. The changing Lebanese market environment, as a result of which the offering of investment banking services and of long term financing does not entail the existence of a separate legal entity;
2. The savings that would be realized through the incorporation of the operations of Audi Investment Bank sal within those of the Bank (the "AIB Operational Merger"); and
3. The absence of any impact of the proposed AIB Operational Merger on the consolidated equity or total consolidated Assets or total consolidated liabilities of the Bank;

resolved to incorporate the operations of Audi Investment Bank sal within those of the Bank and, to that end, adopted a proposal to transfer all the assets and rights of Audi Investment Bank as well as all its liabilities and obligations, to the Bank pursuant to law 192/1993, in anticipation of the relinquishing of its separate banking license;

• And, in consideration of:
• 1. The deteriorating status of the Lebanese Macro environment that have materially affected the Lebanese Banking sector, and more particularly its local private banking arm;
  2. The material reduction in the foreign off balance sheet business of Audi Private Bank sal ("APB"), a fully owned subsidiary offering private banking services, with total Assets aggregating LL 1,263 Billion, total liabilities aggregating LL 1,106 Billion and total equity aggregating LL 157 Billion as at 31 December 2019;
  3. The savings that would be realized through the incorporation of the operations of Audi Private Bank sal within those of the Bank (the "APB Operational Merger") and the synergies that can be created by integrating the governance and control frameworks of

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Audi Private Bank sal into those of the Bank while maintaining the Group geared towards benefiting from a resumption of private banking activities on the medium term; and

1. The absence of any impact of the proposed APB Operational Merger on the consolidated equity or total consolidated Assets or total consolidated liabilities of the Bank;

resolved to incorporate the operations of Audi Private Bank sal within those of the Bank and, to that end, adopted a proposal to transfer all the assets and rights of Audi Private Bank as well as all its liabilities and obligations to the Bank pursuant to law 192/1993, in anticipation of the relinquishing of its separate banking license;

1. Having adopted a proposal to the General Assembly of Shareholders to elect an additional member of the Board of Directors and having, to that end and in consultation with the Governance and Nomination Committee, nominated Chahdan Jebeyli as candidate Director (see below the profile of the candidate Director) for the remainder of the term of office of the current Board of Directors, such nomination having been made in consideration of the significant experience of Mr. Jebeyli, notably in legal, compliance, and oversight matters, and of his personal and professional attributes that would bring a valuable addition to the collective knowledge and expertise of the Board:

Candidate	Brief Profile
Chahdan E. Jebeyli	In his current capacity as Group Chief Legal &
Age: 64 - Lebanon	Compliance Officer, Chahdan Jebeyli manages all
	Legal and Compliance affairs of the Group.
Current position:
Group Chief Legal &Compliance	He is a member of the Board of Directors and
Officer	Chairman of the Audit Committee at Audi Capital,
Member of the Group Executive	KSA (a subsidiary of the Bank incorporated in the
Committee	Kingdom of Saudi Arabia), as well as Board
Chairman of the AML Management	Member at Audi Private Bank sal, and at BAPB
Committee.	Holding Ltd. (The holding company of the private
	banking division of the Bank). Mr. Jebeyli is also
	Chairman of the Compliance Officers Committee of
	the Association of Banks in Lebanon.
	He joined Bank Audi in 2007, moving from
	Citibank where he had acted as Managing Director
	for the legal and compliance affairs in the Middle
	East and North Africa (MENA) region. Before
	Citibank, he practiced in a law firm in the USA with
	a focus on commercial and banking matters.
	Chahdan Jebeyli is a former Lebanese Judge, he
	holds a LLM in International Banking Law Studies
	from the Boston University and is a member of the
	New York and American Bar Associations.

1. Having, by virtue of the authorization previously granted by the general meeting of shareholders, approved and adopted a proposal to the General Assembly to note:
2. • The payment, on the account of the performance of the year 2018, of a performance-related remuneration to the Chair - Group CEO and to the Directors - members of the Group Executive Committee (5 persons), aggregating 1.56% of the consolidated profits from recurring operations before taxes, for the said year;
   • The payment of fixed remuneration in 2019 to Key Executives, including (x) the chair-CEO, and the executive members of the Bank's Board of Directors and (y) the other non-directors members of the Group Executive Committee (in all 13 persons), aggregating LL 18.2 billion;
3. Having confirmed the managerial responsibilities of the Executive Directors and having resolved to limit their remuneration for the year 2020 and that of the other key executives, to fixed remunerations arrangements determined in consultation with the Remuneration Committee, with said payments to be reported to the next General Assembly;
4. Having, pursuant to Article 158 of the Code of Commerce, adopted a proposal (i) to note the implementation of the annual remuneration arrangement to the independent directors (a total of 4 persons), as previously authorized by the General Assembly of shareholders, aggregating LL 2.25 billion per annum (x) for their chairmanship or membership of certain Board committees (the Audit Committee, the Risk Committee, the Governance and Nomination Committee, the Remuneration Committee and the Compliance/AML/CFT Board Committee), and/or (y) for their assistance to the Board and its committees (and to the boards of banking subsidiaries and their committees) including in control and governance oversight matters and in risk oversight matters (all implemented by virtue

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of the authorization previously granted by the general meeting of shareholders); and

to authorize the payment, in 2020, of an annual remuneration to the independent Directors to be determined by the Board in consultation with the Remuneration Committee, with said payments to be reported to the next General Assembly;

1. Having adopted a proposal to (i) note the payment in 2019 of attendance fees to the non-executive members of the Board (a total of 5 persons) amounting to LL 50 million for each Director (as authorized previously by the general meeting of shareholders); and (ii) authorize similar payments in 2020;
2. Having adopted a proposal to authorize the participation of certain Board members and senior executives in the boards of controlled subsidiaries of the Bank, and in one instance, in the Board of a non-competing Bank;
3. Having, pursuant to the matters mentioned under points (v) to (xv) above, adopted the "Special Report of the Board of Directors" produced in accordance with Article 152 of the Code of Money and Credit and Article 158 of the Code of Commerce and summarizing (x) the transactions entered into by the Bank with related parties (including affiliated companies and members of the Board of Directors) during the year ended December 31, 2019 and (y) the remuneration of the members of the Board and of the key Executives; and
4. Having adopted a recommendation of the Audit Committee to authorize the payment of audit fees to the external auditors, for the financial year ending December 31, 2020, not exceeding, in USD, the amount paid to them for the financial year 2019;

Resolved to recommend to the General Assembly to adopt the following resolutions:

1. To approve the Bank's accounts, in particular, the balance sheet and the profit and loss statement, as of and for the year ended December 31, 2019, and to discharge the Chairman and members of the Board of Directors of the Bank in respect of activities performed during the year ended December 31, 2019;
2. To approve the allocation of the 2019 annual results as proposed by the Board of Directors, and to authorize the transfer of other amounts to retained earnings, or to other reserve accounts;
3. To ratify loans granted during the year 2019 to related parties as per Article 152 of the Code of Money and Credit;
4. To authorize the granting of loans to related parties during the year 2020, in accordance with Article 152 of the Code of Money and Credit;
5. To ratify transactions that are subject to the approval of the General Meeting including transactions entered into between the Bank and members of the Board of Directors or other related persons or affiliated companies during the year ended December 31, 2019 that are subject to Article 158 of the Code of Commerce and to authorise the Bank to enter into similar transactions during the year 2020;
6. To approve the acquisition of all the assets and the assumption of all the liabilities of Audi Investment Bank sal pursuant to law 192/1993;
7. To approve the acquisition of all the assets and the assumption of all the liabilities of Audi Private Bank sal pursuant to law 192/1993;
8. To elect a new member of the Board of Directors;
9. To determine the remuneration of Board members who have managerial responsibilities, and to determine the remuneration and attendance fees of the other members of the Board;
10. To authorise the participation of certain Board members and senior executives in the boards of other similar companies and to grant the necessary related authorisations pursuant to Article 159 of the Code of Commerce; and
11. To determine the fees of the external auditors for the year 2020.

All as per the aforementioned Board reports, proposals and recommendations.

VOTING INSTRUCTIONS

Each Holder is hereby requested to return to the Depositary voting instructions, in the form provided separately by the Depositary for this purpose, by which such Holder may give instructions to the Depositary to vote for or against each and any resolution specified in the agenda for the General Meeting.

In order for a voting instruction to be valid, the above-mentioned form of voting instructions must be completed and duly signed by the respective Holder (or in the case of instructions received from the clearing systems should be received by authenticated SWIFT message or market standard authenticated message format) and returned to the Depositary by the date that the Depositary shall specify in such form of voting instructions.

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____________________

INFORMATION REGARDING BANK AUDI S.A.L.

For information regarding the Bank, Holders are advised to review the following documents:

• The Bank's Annual Report for 2019 encompassing:
  o The Audited financial statements of the Bank as of and for the year ended December 31, 2019 and the accompanying notes and auditors' report; and
  o The "Management Discussion and Analysis" which summarizes the Bank's activity during the year ended December 31, 2019.
• The June 30, 2020 Interim financial report encompassing:
  o The unaudited financial statements of the Bank as of and for the period ended June 30, 2020 and the accompanying notes; and
  o The "Management Discussion and Analysis" which summarizes the Bank's activity during the period ended June 30, 2020.

The above documents can be downloaded from Bank Audi's website: www.bankaudigroup.comor may be obtained free of charge from the Bank and the Depositary at the addresses set forth below:

The Depositary:

Bank of New York Mellon - Depositary Receipts

240 Greenwich Street, 22nd Floor

New York, NY 10286

Attn: Mr. Tony Tooma

Email:[e-mail]

Phone: [phone] - 2136

The Bank:

Bank Audi s.a.l.

Bab Idriss

Omar Daouk Street

Bank Audi Plaza, P.O. Box 11-2560

Beirut

Lebanon

Attn: The Group Corporate Secretary

Email:[e-mail]

____________________

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