BEIRUT

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Profits of Syrian affiliates of Lebanon banks sink 98.2 percent

  • Central Bank of Lebanon.

BEIRUT: 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 preliminary financial results issued by the affiliates of seven Lebanese banks operating in Syria, net profits sunk to 52.7 million Syrian pounds in the first quarter of 2013, constituting a decrease of 98.2 percent from 2.9 billion pounds in the first quarter of 2012. That was compared to aggregate net losses of 489.5 million pounds in the fourth quarter of 2012.

The profits were equivalent to about $0.65 million in the first quarter of 2013 compared to $49.8 million in the same period last year, and to $6.9 million in the fourth quarter of 2012, based on the prevailing official exchange rates during the covered quarters.

Lebanese banks in Syria have increased provisions for nonperforming loans, though they realize this will affect profits considerably.

All of the Lebanese banks said they had no intention of withdrawing from the Syrian market now or in the future because they believed the situation would get back to normal eventually.

The report, which was published by Lebanon This Week, the economic publication of the Byblos Bank Group, said that total assets reached 317 billion pounds at the end of March 2013, constituting an increase of 2.2 percent from end-2012.

The increase was due to a 16.8 percent growth in the assets of Bank of Syria & Overseas, a 6.3 percent rise in those of Fransabank Syria and a 1 percent increase in those of Banque BEMO Saudi Fransi.

These rises offset the 24.2 percent fall in the assets of Bank Al-Sharq, the affiliate of Banque Libano-Francaise, the 2.3 percent decrease in those of Bank Audi Syria, the 0.7 percent decline in those of Byblos Bank Syria and the 0.8 percent contraction in the assets of Syria Gulf Bank, the affiliate of First National Bank.

The aggregate shareholders’ equity of the seven banks reached 35.3 billion pounds, or $406.5 million, at end-March 2013, unchanged from end-2012. The aggregate assets of the seven banks were equivalent to about $3.7 billion, based on the prevailing official exchange rates during the covered period.

The banks’ total operating income reached 4.7 billion pounds in the first quarter of 2013, down 35.7 percent from 7.3 billion pounds in the same period last year.

The large annual decrease in net income is mainly attributed to a 99.7 percent decline in the profits of Bank Audi Syria, a 59.5 percent drop in those of Banque BEMO Saudi Fransi, a 64.3 percent contraction in those of Fransabank Syria, a 95.5 percent fall in those of Bank Al-Sharq, and an 83.5 percent decrease in those of Bank of Syria & Overseas.

 
A version of this article appeared in the print edition of The Daily Star on June 25, 2013, on page 5.
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