Lebanon: Banks ride high despite economic slowdown
Lebanon’s banking sector is proving surprisingly resilient in spite of dire economic conditions, according to a recent report issued by one of the country’s largest banks.
Banque Audi’s second-quarter report on the Lebanese economy shows that the country’s economy has contracted by 2% year on year since the beginning of 2007.
With public debt still at around 180% of GDP, construction and tourism activity has lagged, capital inflows have dried up, and the trade deficit has widened.
However, the report says that in the banking sector assets grew by 3.8%, customer deposits by 4.1%, lending by 8.9%, and profitability was up by 4.7%.
Nassib Ghobril, head of economic research and analysis at Lebanon’s Byblos Bank, says this resilience has been a result of a relatively controlled monetary flow, as well as the opening up of financial sectors elsewhere in the Middle East, which Lebanese banks have been able to exploit in their foreign operations.
Indeed, according to one senior Lebanese banker, many of the people in the key positions of Lebanon’s biggest banks are now spending much more time in such countries as Egypt and Saudi Arabia. He said they are only staying at best one or two days a week in Beirut.