| ||Net Profit($ mn)|| ROAcE (%)|| ROAA(%)||Cost-to-Income (%)|
* Does not include the exceptional profits of $95.29 million made from the sale of Bank Audi’s credit cards operations.
The un-audited financial results of the four largest listed Lebanese banks (BLOM, Audi, Byblos, and Bank of Beirut (BoB)), for the first nine months of 2017, show that they have sustained their performance and growth, despite the exceptional conditions still facing Lebanon and the region. Aggregate operational, non-exceptional net profit for the four banks increased to $964.83 million up to end September 2017, growing by 0.74% from the same period in 2016.
On an individual basis, BLOM Bank attained the highest level of operational, non-exceptional net profit of $356.93 million at end September 2017, growing by 3.73% from the same period in 2016. Bank Audi came second with net profit at $341.39 million, down by 2.56%; whereas Bank of Beirut came third with net profit at $151.98 million, up by 1.56%. Byblos Bank’s net profit ranked fourth, rising by 0.76% to $114.52 million.
The profit performance of the four banks can also be seen by looking at profitability ratios, namely the rate of return on average common equity (ROAcE) and on average assets (ROAA), which measure the productivity to generate earnings from equity and assets. BLOM Bank recorded the highest ROAcE at 16.93% and the highest ROAA at 1.55%. The three other banks followed, with Bank Audi’s ROAcE at 13.70% and ROAA at 1.02%; Bank of Beirut’s ROAcE at 11.99% and ROAA at 1.17%; and Byblos Bank’s ROAcE at 8.41% and ROAA at 0.71%. BLOM Bank’s effective performance can be attributed to its highly managerial and operational efficiency. This is demonstrated by BLOM Bank’s cost-to-income ratio of 34.37%, the lowest of all four, followed by 44.77% for Bank of Beirut, 52.91% for Bank Audi, and 53.20% for Byblos Bank.
Growth was not limited to profits only, since it was also registered in key balance sheet items. For Audi, its assets rose by 0.94% to $44.68 billion from end December 2016, with its loan portfolio decreasing by 0.26% to $17.18 billion, while its shareholder’s equity rose by 2.94% to $3.80 billion. BLOM reported $31.79 billion in assets, growing by 7.73%, and its loan portfolio grew by 6.43% to $7.62 billion, while its shareholder’s equity fell by 2% to $2.87 billion due to its recalling of preferred shares 2011. BLOM Bank’s balance sheet aggregates naturally benefited from its acquisition and merger of the assets and liabilities of three HSBC Lebanon branches on 17/6/2017. Assets at Byblos reached $22.39 billion, growing at 7.61%, and its loan portfolio increased by 2.47% to $5.30 billion, while its shareholder’s equity increased to $1.82 billion at a rate of 0.96%. As to Bank of Beirut, its assets rose by 1.57% to $17.47 billion, with its loan portfolio increasing by 5.80% to $5.05 billion, while its shareholder’s equity rose by 3.57% to $2.39 billion
As important, the four banks’ performance also involved strong banking and financial fundamentals. In this respect, for instance, Byblos’s Basel III capital adequacy ratio exceeded 17%, Audi’s coverage of non-performing loans by special and collective provisions and real guarantees stood at 186.4%, BLOM’s non-performing loans ratio was only at 0.6%, and Bank of Beirut’s price-to-book ratio stood at 0.98 dollars.
Once again, these results show the top four listed Lebanese banks’ ability to maintain good growth and financial strength by pursuing conservative and cautious policies, given the exceptional circumstances still facing Lebanon and the region. As a result, they reconfirm the Lebanese banking sector’s position as the leading financial pillar in the country and the backbone of the economy.