BEIRUT: Heavy trading in BLOM Bank’s common and GDR shares buoyed average daily trading on the BSE up 3 percent to 180,509 shares during the last trading week in January. BLOM, the country’s second biggest bank by assets, Wednesday reported a modest 0.28 percent increase in net income to a record $331.5 million in 2011, and a 3.7 percent rise in assets to $23.2 billion.

“Once again, banks are showing solid profits and improvement over 2010 despite a difficult 2011. Investors should consider buying banking stocks, especially BLOM Bank,” said Nancy Elias, senior financial consultant at FFA Private Bank in an interview with The Daily Star.

In addition to BLOM, Bank Audi and Byblos also reported slight increases in net profit in 2011, and all three took hefty provisions for potential credit losses from regional subsidiaries. Despite the provisions, BLOM said its fourth-quarter profits rose 2.1 percent year-on-year to $95.2 million after having tumbled 10.1 percent in the third quarter, a sign of recovery and sustained resilience.

“Balance sheets and earnings are clean, so we are today more upbeat about Lebanese banks than we were previously,” said Elias.

Positive earnings results brought a welcome pause to market performance as the BLOM Stock Index held its ground at 1,167.86 points. Bank Audi’s GDRs closed the week up 1.5 percent to $5.99, while its common shares inched up 0.88 percent to $5.75.

Similarly, prices of BLOM GDR and BLOM, which together made up 73 percent of traded shares during the week, rose 0.8 percent and 0.14 percent respectively. Block trading in Byblos also appeared to continue with another 115,000 shares changing hands, leaving the stock down 1.25 percent to $1.58.

Like the banks, Solidere’s two classes of shares showed divergent performance. Class “A” shares dropped 1.3 percent to $14.09 as “B” shares rose 1 percent to $14.17. Asked whether the stock may break below $14 in the upcoming week, Elias said: “Anything is possible because it’s very sensitive to politics and investor sentiment. Long-term investors should be holding the stock although in the short-term there is some concern about Solidere’s ability to generate cash from land sales amid a stagnant property market.”

The week also saw the listing of BLC’s Class “A” and Class “B” preferred shares which pushed market capitalization up 1 percent to $10.3 billion.

According to Elias, the market may finally be making its turn for the better. “It’s time for the momentum to return because 2011 was catastrophic and now that banks are releasing earnings, things are turning out to be better than expected,” she said.

Lebanon’s Central Bank Governor Riad Salameh said economic growth in 2012 may exceed 4 percent barring any spillovers from Syria, compared to an estimated 1.5 percent in 2011.

With stable earnings, banks may see their shares rebound as investors position themselves for dividend announcements and distributions, which according to Elias, are sure to come despite moves by banks to preserve capital. “I don’t think banks will cut dividends. Those are sustainable in my opinion,” she said.