BDL recently released the consolidated balance sheet of Lebanese commercial banks which revealed that the banks’ Total assets added 4.09% year-to-date (YTD), to reach $259.7B by November 2019. In fact, banks’ total assets rose mainly owing it to a 19.24%YTD uptick in commercial banks’ Deposits with BDL (constituting 59.79% of total assets) to settle at $155.3B over the same period.
On another front, the heightened uncertainty post-October 2019, coupled with the environment of high interest rates that governed the year 2019 weighed down on commercial banks’ lending activity. Accordingly, banks’ Total loans to the private sector retreated by 11.5%YTD to settle at $52.17B by November 2019. The breakdown of loans revealed that Claims on resident customers (17.8% of total assets) slipped by 10.75% since year-start to stand at $46.2B by November 2019. By the same token, Loans to Non-resident customers (2.3% of total assets) slumped by 16.54%YTD to stand at $5.9B over the same period. As for Claims on the government, they declined by 9.92% since year-start to stand at $31.7B. In details, banks’ subscription to T-bills fell by 7.42%YTD to $16.1B as banks shied away from non-attractive yields offered on government papers amid the current circumstances. In their turn, their subscription to Eurobonds recorded a decline of 12.4% (equivalent to a $1.9B down tick) to stand $14.1B over the same period, noting that BDL settled the $1.5B Eurobond maturing on November 28th 2019 and the attached coupon payments.
On the liabilities side, banks’ Resident customers’ deposits (49.3% of total liabilities) decreased by $7.4B to settle at $128.03B by Nov.2019. In details, deposits denominated in LBP slid by 19.8%YTD to $37.3B. Meanwhile, deposits in foreign currencies added 2%YTD to $90.8B. In fact, part of the LBP deposits continued to be converted to the US dollar while the larger portion of deposits continued to be withdrawn out of the banking system. It is interesting to add that some of the reduction in deposits in the past three months seemed to have been used to pay out a portion of the loans.
As for the Non-resident customers’ deposits (12.77% of total liabilities), it also retreated by $4.6B over the same period to $33.2B, owing it to a 21.6%YTD decline in LBP deposits to $3.4B and a 10.84%YTD retreat in deposits in foreign currencies totaling $29.8B by November 2019. As such, the dollarization ratio of Private sector deposits jumped from December 2018’s 70.62% to 74.69% in November 2019.
Total Assets of Commercial Banks by November (in $B)