Synagogues, hospitals, university campuses, scientific institutes, and academic scholarships around the world are named for Edmond J. Safra. But who was he?
He was a man who wore only custom tailored navy suits, stayed at the fanciest hotels and dined at the most exclusive restaurants. But he also loved to hangout in hummus joints and chow down on some good Jewish deli. In fact, he reportedly could intuit inflation from the price of a pastrami sandwich.
Born in Beirut in 1932, Safra was one of the most successful bankers of the 20th century. The scion of a Jewish banking family originating from Aleppo, Syria, his father sent him to Milan in 1947 to expand the family’s business. At just 15 years of age, he was seeking arbitrage opportunities and handling gold trades between Europe, the Middle East and Hong Kong.
When political realities in the 1950s made it impossible for his family to remain in Beirut, Safra moved them to Brazil. There he engaged in import-export and trade, and founded Banco Safra, later handing it to his two younger brothers to own and run. In the same decade, Safra founded Trade Development Bank in Geneva, and in 1966 he opened Republic National Bank of New York, a retail bank in the heart of Manhattan that grew to be the 11th largest bank in the United States. Finally, in 1988 he founded Safra Republic Holdings in Luxembourg and Republic National Bank of New York (Suisse) SA in Geneva and Lugano.
Republic bought banks in the New York area, Florida and California. By the 1990s, Safra’s banking entities had two dozen offices, branches, and subsidiaries in major banking centers around the world. He was running a multibillion-dollar enterprise with 7,000 employees.
Hitting bookstore shelves on August 30, “A Banker’s Journey: How Edmond J. Safra Built a Global Financial Empire,” by Daniel Gross is a biography charting Safra’s professional success while putting it in the context of his Middle Eastern Sephardic Jewish background. As a business writer and a Halabi (Jew with Aleppo roots) himself, Gross was well suited to the task.
“Safra’s mode of banking traces its origins to the small kind of stuff they were doing in Aleppo and Beirut. His genius was to scale that by plugging into global networks and using technology,” Gross said.
In a conversation with The Times of Israel from his home in Westport, Connecticut, Gross said he was given access to Safra’s massive archive by his widow, Lily Safra. Housed at the Edmond J. Safra Philanthropic Foundation in Geneva, the archive contains all of Safra’s personal and professional papers, as well as interviews conducted after his death with hundreds of people who knew him at various stages of his life.
Uncharacteristically for Halabi-Beiruti men, Safra married late, and not to a younger woman from the community. He also never had children of his own. Having finally found a true partner in life, he married the culturally sophisticated Lily Monteverde (née Watkins) in 1976. She was a twice-divorced, once-widowed wealthy socialite with three children. Together they owned lavishly decorated homes in Geneva, London, Paris, New York, Monaco, and the French Riviera.
Lily Safra, who served as chair of the Edmond J. Safra Philanthropic Foundation for more than 20 years, died at age 87 on July 9, 2022.
If people know anything of the low-profile, somewhat mysterious Safra, it’s that he was smeared by American Express after a merger between it and Republic failed, and that he died in 1999 when a personal nurse’s bizarre plan to set a fire in Safra’s Monaco residence with the intention of heroically saving Safra went horribly wrong.
Gross explained to The Times of Israel that he wanted to break new ground by understanding how Safra lived and stayed true to himself throughout his amazing career in the following edited interview.
How did Edmond Safra’s personal background influence the way he ran his banks?
In Lebanon and Aleppo you only lent money to people you knew, and paying it back was not only a matter of personal honor but a matter of your family’s honor. There was no deposit insurance like we have in the US, no bailouts, and no central bank that was going to come to anybody’s rescue. If you put your deposits with him, it was on him to make sure they were good. His first responsibility was to make sure that the people who put their money in their accounts at his banks would have it in case they needed to flee or move. The story of the Jewish experience in the 20th century is one of displacement. People had suitcases packed.
So how did this thinking play out in terms of the kind of lending his banks did?
He didn’t like to lend to people for mortgages, real estate, or consumer credit. He believed in lending very carefully, taking the sure thing when it came to credit, and getting involved in other types of needed banking activities like trade finance and factoring. Other banks weren’t interested in these because they thought they weren’t profitable.
He loved making loans to the International Monetary Fund or World Bank. They carried a lower interest rate, but he didn’t care. He could sleep at night knowing that these loans were guaranteed. He was involved in a lot of lending to governments because back then governments did not default on their debt. He also lent to other banks.
What other financial activities was Safra involved in?
He had a large business in moving physical bills around the world. This was back in the day before electronics and the Euro. This business had a very low margin, but if you knew how to do it you couldn’t lose money — unless you lost the cash. This goes back to the Safras having financed caravans of gold from Kuwait to Lebanon in the 19th century.
Did he ever get involved in the stock market?
Safra’s banks were reluctant to offer things like mutual funds because he felt that the stock market was unpredictable and people could lose money. He was hesitant about the classic Wall Street investment banking operations, like underwriting stocks, because the compensation was so high and it was so variable.
Is this why others in the financial world could be suspicious of him?
The profile of his banks was very different from a classic American or even European bank. His banks were publicly held. They made annual reports, and they had to give documents to the Securities and Exchange Commission every quarter. But there was a mystery as to how he was making all this money because there was this profile.
In addition, banking rests on leverage. Banks borrow a lot of money to finance their activities to have scale. His banks always had a very low level of leverage. A lot of the cash and assets were set aside because he didn’t want to get caught out. He personally owned 30% of Republic Bank. If something went bad, it was on him.
Was there something beyond his approach to banking that made people question him?
Safra spoke six languages and was always on the move. Part of his genius was that when he was in Geneva he was a Swiss banker. When he was in New York it was a whole different milieu and he was highly functioning there. When he went to Brazil he didn’t know the language and within a couple of years, he was doing business with everybody. That was his genius — an ability to fit in and do business in all these places simultaneously.
But that also meant that he was often looked at as the “other.” In Beirut he was Syrian. In Brazil, he was a Lebanese Jew. I don’t think they fully accepted him in Switzerland even though he had his base of operations there for 30 some years. He kept his Lebanese citizenship, clinging to memories of Beirut and Lebanon from the 1940s and 1950s.
And you layer on to that the fact that Sephardic Jews are a very small minority in America and Europe. Their customs are weird and strange to Ashkenazi Jews and others, so he had that working against him. He also believed in superstition and the evil eye, so he purposely didn’t bring much attention to himself. He would not go on TV to talk about banking. He was not part of that modern media ecosystem. For him to sit down for an interview with a publication was an occasion. I haven’t been able to find a single video of him talking.
The charitable Safra hired many relatives and members of the Halabi-Beiruti diaspora. It seems like he had trouble separating his professional life from his personal and communal life.
I wouldn’t say he had trouble. That was his pleasure. In Aleppo and Beirut, there was a formal community council. If you were from one of the big families, you were the president of the council. They said that in the Syrian world there were no aristocrats, but the Safras were as close as you come to that. His father was often the head of the community council. So from a young age, there was seamlessness between I run this bank, a lot of customers are people in this community, and I am also a senior leader in this community locally and in exile around the world.
Overall, your book paints Safra in a positive light. He must have had flaws and shortcomings.
He could be in some ways too loyal to individuals. He was also fearful at times. Sometimes it served him well, and in other areas, it kind of got the best of him. He was fearful that other people were out to hurt him. Sometimes he was fearful that if something went wrong he would be responsible for everything, therefore he was very conservative about things.
I think his biggest misstep was that he could not figure out a succession plan. He didn’t have any children, and his nephews were busy running Banco Safra in Brazil. Based on his background, he would not consider the possibility of female relatives running his banks.
He was never the CEO of Republic Bank. He was the Chairman and owned 30%, but he was not the actual CEO. At the same time, it was very clear who was in charge and made all the decisions. He was not great about letting go and delegating, so the top executives may not have felt as empowered as they should have been. His banks didn’t do the classic things that big institutions do about grooming leadership, such as people getting promoted and strategic planning — at least not at the usual level.
Ultimately when he sold Republic and Safra Republic to HSBC he wanted to sell them for cash. He didn’t want to take stock in some other company because then he would have to trust someone else with his wealth.
What was the outcome of this?
This book is in many ways a story of triumph and success in business, but there is also an element of tragedy. The tragedies are threefold. First, he got sick with Parkinson’s in his early 60s. Second, he died in tragic circumstances years before he should have. And third, the story of his banks kind of ended with the sale. Today when somebody sells a company it’s a triumphant exit. For him, it was deflating. He said, “I’ve sold my babies.” What for any other financial figure would have been a crowning achievement was for him a source of sadness.
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