Lebanese Commercial Banks’ Total Assets Up Year to Date by 0.16% to $188.38B by January 2021

Handcuffed by financial crisis and riven with political uncertainty, Lebanese banks are seriously paralyzed and starved of funding; but given the central bank’s target that aims to help the banking sector in overpassing the current situation, total assets of Lebanese commercial banks increased by 0.16%, year-to-date (y-t-d), to stand at $188.38B in January 2021, according to Lebanon’s consolidated commercial banks’ balance sheet. The increase can be explained by the banks application of the Central Bank’s circular 154 relating to the increase by 20% of commercial bank capitals and 3% of their liquidity.

In details, resident customers’ deposits (which grasp 58.42% of total liabilities) decreased since December 2020 by 0.19% to $110.03B in January 2021, with deposits in LBP increasing by 0.93% to $24.66B while the deposits in foreign currencies declining by 0.50% to stand at $85.37B.

As for Non-resident customers’ deposits grasping 14.52% of total liabilities, they slightly increased by 0.004% and remained at $27.35B over the same period. In fact, the deposits in LBP retreated by 1.50% to reach $2.22B while deposits in foreign currencies added 0.14% and totaled $25.13B in January 2021. Important to mention that the dollarization ratio for private sector deposits increased from 76.70% in January 2020 to 80.20% in January 2021.

On the assets side, Reserves, constituting 59.43% of total assets, recorded a y-t-d uptick of 0.35% to settle at $111.92B in January 2021. Deposits with the central bank (BDL), grasping 98.90% of total reserves, witnessed a slight y-t-d increase of 0.24% to reach $110.69B.

Meanwhile, Claims on resident customers, constituting 16.68% of total assets, shrank by 1.13%, to stand at $31.40B in January 2021. The drop in the loans portfolio followed the early settlement of some loans from related customers’ deposits through a netting process in fear of a haircut on deposits or a formal devaluation of the currency. Moreover, Resident Securities portfolio (11.95% of total assets) added 0.21% during January to stand at $22.51B. Specifically, the subscriptions in T-bills in LBP recorded decline of 0.12% to reach $11.44B in January 2021 while the subscriptions in Eurobonds added 0.60% and totaled $9.49B for the same period. In addition, claims on non-resident financial sector rose by 2.24% to record $4.82B in January 2021.

Lebanese banks strived to comply with the Central Bank’s circular 154 by the end of February. In turn, Lebanon’s Banking Control Commission will be evaluating which banks met the targets for boosting their capital and liquidity. In addition, Banque du Liban recently issued a statement in which it decided to launch an electronic currency exchange platform to register all transactions with the help of the commercial banks and licensed exchange dealers. The new statement shows the effort done by BDL to reduce the Lebanese pound’s exchange rate against the dollar that reached its all-time high level last week at 15,000 LBP per USD.

Commercial Banks Assets and Residents Customer Deposits by January ($B)

Lebanese Commercial Banks’ Total Assets Up Year to Date by 0.16% to $188.38B by January 2021



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