Lebanese banks in Syria hit hard
But taking into account the depreciation of the Syrian pound against the U.S. dollar, the results show a steeper decline of nearly 77 percent.
Click here to add Bank of Syria as an alert
Disable alert for Bank of Syria,
Click here to add Byblos Bank as an alert
Disable alert for Byblos Bank,
Click here to add Byblos Bank Syria as an alert
Disable alert for Byblos Bank Syria,
Click here to add Fransabank as an alert
Disable alert for Fransabank,
Click here to add Sharq Bank as an alert
Disable alert for Sharq Bank,
Click here to add Syria Gulf Bank as an alert
Disable alert for Syria Gulf Bank,
Click here to add Syrian government as an alert
Disable alert for Syrian government
The combined net profits of six out of seven Lebanese banks operating in Syria dropped 54 percent in the first half of 2014 to SYP 2.89 billion, down from SYP 6.35 billion during the same period last year.
But taking into account the depreciation of the Syrian pound against the U.S. dollar, the results show a steeper decline of nearly 77 percent, to $19.2 million in the first half of 2014 from $90.12 million.
While the net profits were calculated using the current official exchange rate – set by the Syrian government – of around SYP 150 to the dollar, the rate on the black market reportedly exceeds 300 SYP to the dollar.
The Syrian pound has depreciated significantly against foreign currencies since the conflict broke out three years ago, when the pound traded at around 50 to the dollar.
According to Credit Libanais’ weekly economic newsletter, Bank Audi Syria posted the highest net profits – $9.08 million – followed by Bank BEMO Saudi Fransi with $8.78 million, Bank of Syria & Overseas with $3.58 million, Sharq Bank with $2.52 million and Byblos Bank Syria with $1.09 million. Syria Gulf Bank posted a loss of $5.79 million. Data for Fransabank Syria have yet to be released.
Combined net interest income for all six banks dropped by 33 percent from $19.06 million to $12.66 million, while net fee and commission income decreased by almost the same percentage, from $12.85 million to $8.7 million.
The combined consolidated assets of all six banks in Syrian pounds were 6.86 percent higher, while they increased only by 2.7 percent when calculated in U.S. dollars. Several bankers told The Daily Star earlier this year that despite holding the majority of their assets in dollars, the seven banks were reporting financial results in Syrian pounds to inflate their balance sheets.
Consolidated assets reached $2.59 billion by the end of June 2014, compared to $2.52 billion by the end of 2013.
Bank BEMO Saudi Fransi held the highest share of combined assets at 33.19 percent, followed by Bank of Syria & Overseas at 26.4 percent, Bank Audi Syria at 14.75 percent and Byblos Bank Syria at 11.94 percent.
While Lebanese banks subsidiaries in Syria have closed many branches in areas that have witnessed heavy clashes or suffered massive destruction, branches in relatively calm regions continue to offer services to existing clients, but are not granting loans or offering lines of credit to merchants.
- Al Tayer bucks the US department store trend with Bloomingdale's Kuwait opening
- Gulf Islamic banks set to outperform conventional banks for second year: Moody's
- Jordan secures EU finance for socioeconomic and environmental programs
- Same-day service deliveries in GCC an untapped market: Wing CEO
- Will terror attacks damper Arabs' appetite for European holidays?