BEIRUT: Lebanese banks continued to see growth in assets and deposits in the first four months of this year despite the sharp political differences and volatile situation in some Arab states.
But this growth was relatively slower paced than the same period of 2010, according to Bank Audi’s Lebanon Weekly Monitor.
Measured by the total domestic assets of banks, banking activity grew by 3.8 percent over the covered period, moving from $128.9 billion at end-December 2010 to $133.8 billion at end-April 2011.
This $4.9 billion rise in total assets compares to a higher $5.4 billion rise in the same period of 2010 marked by relatively stable political conditions favoring economic buoyancy.
Over the first four months of 2011, banking activity in Lebanon continued to be favored by customer deposits, which remain the backbone of banks’ balance sheets and the major source of funding. Customer deposits progressed by $2.7 billion between December 2010 and April 2011 (equivalent to a 2.5 percent yearly rise), but this was the result of mixed dynamics.
The report said that the political crisis the country witnessed in January 2011 following the collapse of the government created monetary pressures driving some currency conversions but limited outflows from the sector.
This pushed the deposit base to contract slightly by $1.1 billion over the month of January.
“Yet, with the designation of a new prime minister toward end-January, concerns started to dissipate and balance was restored on domestic markets, which helped banks’ deposit base resume an upward trend during February, March and April 2011,” Bank Audi said.
Customer deposits grew by $1.3 billion and $1.8 billion, during March 2011 and April 2011, correspondingly compared to respective growth rates of $1.1 billion and $1.0 billion witnessed in the same months of 2010.
The Bank Audi report added that this reflects a further sign of normalization of financial sector conditions across the country notwithstanding lingering politico-security uncertainties.