Lebanese banks continue to feel the heat in Syria
Profits of Lebanese banks operating in Syria fell by 45.8 percent to $13.8 million in 2012, a clear indication that the turmoil in the country is having a negative impact on most sectors of the Lebanese economy.
According to Lebanon This Week, the economic publication of the Byblos Bank Group, banks’ total operating income in 2012 reached SYP14.5 billion (or $187.5 million).
The large decrease in net income was mainly attributed to a 92 percent decline in the profits of Bank of Syria & Overseas (-SYP524.7 million), a 97 percent drop in those of Syria Gulf Bank (-SYP249.9 million), a 94.7 percent drop in those of Byblos Bank Syria (-SYP160.4 million), a 95.1 percent decrease in those of Bank Audi Syria (-SYP108.8 million), a 62.1 percent contraction in those of Fransabank Syria (-SYP93.3 million) and a 13.4 percent decrease in those of Banque BEMO Saudi Fransi (-SYP88.8 million), it added.
All Lebanese banks operating in Syria have increased provisions for nonperforming loans, and this has affected the profitability of the lenders.
The profits of Bank Al-Sharq increased by 657.8 percent, or by SYP321.4 million, to SYP370.3 million. The seven banks have yet to publish their detailed balance sheets and financial results for 2012.
The preliminary financial results issued by the affiliates of seven Lebanese banks operating in Syria show that their aggregate assets reached SYP310.8 billion, or $4 billion, at the end of 2012, constituting a decrease of 4.2 percent from end-2011.
The decline was due to a 22.1 percent fall in the assets of Bank Audi Syria (-SYP14 billion), an 18.3 percent drop in those of Bank of Syria & Overseas (-SYP12.8 billion) and a 6.1 percent contraction in those of Byblos Bank Syria (SYP2.8 billion).
The assets of Banque BEMO Saudi Fransi increased by 11.6 percent (+SYP8.8 billion), those of Syria Gulf Bank, the affiliate of First National Bank, rose by 17.4 percent (+SYP3.9 billion), the assets of Fransabank Syria improved by 8.9 percent (+SYP2.8 billion) and those of Bank Al-Sharq, the affiliate of Banque Libano-Française, grew by 4.4 percent (-SYP0.7 billion).
The aggregate shareholders equity of the seven banks reached SYP36.4 billion, or $470 million, at end-2012, constituting an increase of 3.6 percent from end-2011.
Despite the fall in profits and the chaotic situation in Syria, nearly all of the Lebanese banks operating in the country have said that they have no intention of liquidating their presence there or selling their shares to other investors.
- Lebanese banks feel the burn of war-torn Syria
- Lebanese banks on the straight and narrow, complying with international law - World Union of Arab Bankers
- Gaza and Syria cause headache for Lebanon's Eurobond sale
- Negative Syria impact on Lebanon's economy balanced by gains
- Lebanon's domestic banks looking overseas