BEIRUT: Preliminary financial results from Lebanese banks operating in Syria show a 29 percent rise in their assets, according to Byblos Bank’s Lebanon This Week report, but this figure is based on the Syrian pound – in dollar figures, the picture is nearly the exact opposite.

Lebanon This Week reported that the seven Lebanese banks operating in Syria had aggregate assets of 400.4 billion Syrian pounds at the end of 2013, compared to a reported 310.8 billion pounds the previous year.

However, when the depreciation of the pound over the last year is taken into consideration, this rise in assets evaporates. Under the current official exchange rate, the 400.4 billion pounds of assets are currently worth $2.8 billion; the 310.8 billion pounds held by the banks at the end of 2012 were worth $4 billion at the time. In dollar terms, the banks’ aggregate assets fell by 30 percent.

One banker told The Daily Star that despite holding the majority of their assets in dollars, the seven banks were reporting financial results in Syrian pounds to inflate their balance sheet.

“They [banks] just calculated the assets based on the dollar rates in the market. This way, the assets will look bigger than they are actually are,” the banker said.

The Syrian pound has depreciated significantly against foreign currencies since the conflict there broke out three years ago.

The official rate of the pound, set by the Syrian Central Bank, is 143.5 against the dollar, but the rate in the black market reportedly exceeds 300. The pound traded around 50 to the dollar before the war erupted.

In pound terms, the Bank of Syria & Overseas led the growth in assets, reporting a 61.9 percent increase. Banque BEMO Saudi Fransi was second, with 39.7 percent, and Fransabank Syria reported a 26.2 percent rise in assets.

However, profits at the banks’ Syrian operations drastically grew in 2013.

“The substantial rise in net income is due to a significant increase in the unrealized net foreign exchange gains on structural positions,” the report explained.

The aggregate net profits of the seven banks reached 3.4 billion pounds in 2013 compared to 36.8 million pounds the previous year. At the prevailing currency rates for each year, the aggregate net profits grew from around $478,000 to approximately $23 million.

Bank BEMO led in profit growth, reporting an increase of 19 billion pounds, followed by Byblos Bank Syria with a growth of 736.8 million pounds.

“The branches of the Lebanese banks are open to the clients in areas which are not witnessing fighting like Damascus and parts of Hama and Aleppo,” the banker said.

“But the branches in areas that are the scene of heavy clashes have closed or been damaged.”

He added that Lebanese and foreign banks were not granting loans or offering lines of credit to merchants and clients: “These branches only deal with customers who still have bank accounts.”