Lebanon's banks decline masked by insurance company sale
Lebanon’s five listed banks posted an aggregate 2.4 percent growth in profits in 2012 standing at $1.01 billion, compared to $986 million a year earlier. However, excluding the multimillion proceeds from the sale of Audi’s insurance arm, LIA Insurance SAL, results shows a 2.1 percent year-on-year decline in aggregate net income.
Bank Audi sold 81 percent of LIA Insurance for $44.5 million to Saham Finances, a Morocco-based African insurance company, back in June 2012.
Byblos, BLOM, Audi, Bank of Beirut and BEMO are the only Lebanese banks listed on the Beirut Stock Exchange.
The five banks’ aggregate net profits reached $246.8 million in the fourth quarter of 2012, 7.8 percent lower than the $267.7 million posted in the last quarter of 2011.
The banks’ net profits contracted 2.5 percent year-on-year in 2012’s third quarter, remained unchanged in the second quarter, and showed a rise of 2.7 percent in the first quarter, which analysts said indicates the banks were operating under consistently worsening conditions throughout the year.
The aggregate net interest income of the five banks reached $1.55 billion in 2012, up 6.1 percent from $1.46 billion in 2011. Total net fees and commission income increased 3.8 percent to $473.5 million year-on-year.
Total operating income of the listed banks reached $2.7 billion last year, up 10 percent from $2.5 billion in 2011.
The assets of the five banks increased 8 percent from $86.1 billion in 2012. Total loans increased 13.1 percent to $24.7 billion at end-2012.
Deposits rose by 8.1 percent from end-2011 to reach $72.1 billion.
The five banks’ aggregate loans-to-deposits ratio stood at 34.3 percent at end-2012, up from 32.8 percent at end-2011. Collective cost-to-income ratio increased to 44.1 percent in 2012, up from 43.6 percent in the previous year.
BLOM Bank posted the lowest loans-to-deposits ratio at 27.7 percent, followed by Byblos Bank with a ratio of 30.8 percent, Bank Audi with 39 percent, Bank of Beirut with 39.4 percent and BEMO with a 49 percent ratio.
The banks’ collective cost-to-income ratio stood at 44.1 percent in 2012, increasing from 43.6 percent during the previous year. BLOM Bank posted the lowest cost-to-income ratio at 38.2 percent, followed by Byblos Bank with a ratio of 45.6 percent, Bank Audi with 46.8 percent, Bank of Beirut with 50.3 percent and BEMO with 72.1 percent.