BEIRUT: Financial results issued by the affiliates of seven Lebanese banks operating in Syria show that their aggregate assets reached 341 billion Syrian pounds, or $7.1 billion, at the end of September 2011, constituting a decrease of 13 percent from end-2010, as reported by Lebanon This Week, the economic publication of the Byblos Bank Group.

The decline was due to an average drop of 24.3 percent in the assets of Banque BEMO Saudi Fransi, Bank of Syria & Overseas and Bank Audi Syria – the three largest private commercial banks by assets. The banks’ loans totaled SYP146 bln, or $3 bln at the end of September, reflecting a drop of 2 percent from the end of 2010.

The report did not say why assets and deposits fell this year although most observers and experts attribute this decline to the political and security turmoil in Syria.

There were unconfirmed reports that part of the deposits fled to Lebanon. However, the Central Bank and commercial banks denied any significant cash inflow from Syria this year.

The loans’ decline was mainly caused by an average contraction of 21.3 percent in the lending of Bank of Syria & Overseas and Bank Audi Syria in the first nine months of the year. Also, the banks’ customer deposits reached SYP262.6 bln, or $5.4 bln at the end of September, regressing by 21.3 percent in the first nine months of the year.

The drop was prompted by an average contraction of 29.2 percent in the deposits of Banque BEMO Saudi Fransi, Bank of Syria & Overseas, and Bank Audi Syria. The deposits of each of Banque BEMO Saudi Fransi and Bank Audi Syria contracted by around 31 percent year-to-September, and posted the steepest drop among the affiliates of Lebanese banks operating in Syria in the covered period.

They were followed by Bank of Syria & Overseas with a 25.2 percent drop in deposits and Fransabank Syria with a decrease of 1.2 percent.

In parallel, Bank al-Sharq, the affiliate of Banque Libano-Francaise, saw deposit growth of 53.2 percent; followed by Syria Gulf Bank with a 27.3 percent rise and Byblos Bank Syria with an increase of 6 percent.

The ratio of the banks’ loans-to-customer deposits stood at 55.6 percent at end-September 2011 compared to 44.7 percent at the end of 2010. The banks’ aggregate shareholders equity reached SYP30.6 bln, or $634 mln at end-September, constituting an increase of 10.7 percent from end-2010.

In parallel, the aggregate net profits of the seven banks reached SYP1.7 bln, or $35.6 mln in the first nine months of 2011, constituting an increase of 21.6 percent from SYP1.4 bln in the same period last year.

The aggregate net interest income of the banks reached SYP5.5 bln, or $114.2 mln, in the first nine months of 2011, up 25.2 percent from the same period last year; while their total net fees and commission income increased by 12.2 percent to SYP1.5 bln, or $31.2 mln. The banks’ total operating income reached SYP8.3 bln, or $171.6 mln in the first nine months of 2011, up 31.1 percent year-on-year.

The increase in net income is attributed to a rise of 33.5 percent from the same period last year in the profits of Banque BEMO Saudi Fransi, and the shift from a loss to a profit for Syria Gulf Bank, as well as to a rise from a low base in the same period last year of Fransabank Syria’s profits.