Lebanese banks’ net income drops


The Alpha Group consists of 16 banks with deposits in excess of $2bn each.

BEIRUT: Lebanon’s 15 largest banks in terms of assets and deposits saw their net income drop eight percent to $484 million in the first quarter of 2019, according to Bank Byblos’ latest report.

Net earnings dropped from $526.5 million in the same period of 2019 while the aggregate net operating income regressed by 5.9 percent to $1.27 billion year-on-year in the first quarter of 2019.

Meanwhile, the banks’ net interest income decreased by 5.2 percent year-on-year to $989.4 million in the covered quarter, while their net fee income declined by 2.7 percent year-on-year to $218.4 million, the report notes.

The Alpha Group consists of 16 banks with deposits in excess of $2bn each.

In addition, net gains on financial assets at fair value rose by 25 percent annually to $106 million in the first quarter of 2019, while net losses on financial investments stood at $9.8 million in the first quarter of 2019 relative to gains of $2 million in the same period of last year.

In terms of customer deposits, they stood at $181.1 billion at the end of March 1019, increasing by 1.6 percent from end-March 2018. However, deposits from related parties totaled $2.64bn at end-March 2019 and declined by 10.4 percent from end-2018 and by 22.7 percent from a year earlier, according to the report.

Net loans and advances to customers totaled $60.2bn at end-March 2019, down by 6.7 percent from the end of March 2018.

Lebanese banks have been facing immense pressure in recent months, as they’re holding around 50 percent of the government’s public debt, along with the Central Bank.

Lebanon is currently treading an unsustainable path as it struggles with a surging twin deficit and slumping economic growth, estimated at 0.3 percent in 2018.

The current account deficit stands at around a dangerous 27 percent of GDP, while the public debt to over 150 percent of GDP.

In an attempt to reduce the budget deficit to around 7 percent of GDP – which currently stand at 11 percent – the government is expected to ratify an austerity budget, the likes of which “has never been seen in Lebanon’s history,” as Prime Minister Saad Hariri recently described it.



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