Byblos net profits drop by 4 percent in Q2

File - Foreign experts examine the front entrance to the Jnah branch of Byblos Bank in Beirut on Saturday, March 9, 2013. (The Daily Star/Mahmoud Kheir)

BEIRUT: Byblos Bank’s net profits fell 4 percent in the second quarter of 2013, a day after the bank’s chairman told The Daily Star he expected profits of Lebanese banks to fall if political and security instability persisted. Byblos Bank posted second-quarter profits of $40.2 million compared to $41.8 million during the same period last year, according to research by FFA private bank.

Operating income grew 13 percent but was partly offset by lower net interest income, which fell 14 percent, while fees and commissions income dropped 11 percent. Provisions stood at $30 million, up by $6 million compared to the second quarter of 2012.

In 2012, Lebanese banks increased their provisions against nonperforming loans in Syria, where the ongoing conflict has led to a sharp decline in their operations.

Profits of Lebanese banks operating in Syria in the first three months of 2013 fell by 98.2 percent to $640,000 from $49.8 million in the same period of 2012.

According to the FFA report, Byblos Bank’s deposits and loans grew respectively by 3 and 2 percent.

Byblos Bank Chairman Francois Bassil told The Daily Star he expected bank profits to fall by 10 percent in the third quarter of 2013 and by 20 percent in 2014 if political and security conditions do not improve.

Central Bank Governor Riad Salameh has projected between 8 and 10 percent growth in assets and customer deposits in 2013, which would be almost in line with 2012 results.

Profits at Lebanon’s 13 Alpha Group banks, whose deposits are in excess of $2 billion, surged 15.5 percent year-on-year to $431.32 million in the first quarter of 2013.

Lebanese banks have reduced their subscription to new Treasury bills or sovereign Eurobonds in recent years.

According to Bassil, Lebanese banks invested part of their money abroad with lower return on their investment, which would affect profits in general.

The Central Bank stepped up its purchase of T-bills to help meet the financial needs of the state.

Elsewhere, Jordan-based Arab Bank posted an increase of 7.5 percent in net profit in the first half of 2013 to $387 million compared to $360 million for the same period in 2012.

A version of this article appeared in the print edition of The Daily Star on July 30, 2013, on page 5.




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