Lebanese banks feel the burn of war-torn Syria

Published December 11th, 2012 - 10:34 GMT
Lebanese banking affiliates’ profits in Syria plunge by more than 69 percent
Lebanese banking affiliates’ profits in Syria plunge by more than 69 percent

Profits of Lebanese banks’ subsidiaries in war-torn Syria have plunged by 69.42 percent in the first three quarters of 2012, a report by Credit Libanais said. “The prevailing hostilities in Syria which ravaged the Syrian economy since early 2011 and the heightening uncertainties and risks surrounding Syria’s operating environment started to take a greater toll on the performance of Syrian affiliates of Lebanese banks,” the report added.

The banks affected by the turmoil were Bank Audi Syria, Bank of Syria & Overseas, Byblos Bank Syria, Bank BEMO Saudi Fransi, Fransabank Syria, Sharq Bank and Syria Gulf Bank.

“More particularly, Lebanese banks’ Syrian subsidiaries recorded a sharp 69.42 percent annual drop in net profits to around $7.59 million in the first three quarters of 2012 due to the increasing provisions on loan impairments,” the report said.

It added that Fransabank Syria reported the highest share of all seven banks’ profits at 34.46 percent, followed by Sharq Bank at 30.52 percent, Bank BEMO Saudi Fransi at 21.89 percent, Bank of Syria & Overseas at 13.82 percent, Byblos Bank Syria at 6.32 percent and Bank Audi Syria at 0.64 percent, with Syria Gulf Bank being the only banking affiliate to report a loss.

Net interest income dropped by 15.24 percent year on year SYP 4.68 billion ($67.52 million) up to September 2012, coupled with an approximate 5.53 percent drop in net fee and commission income to SYP 1.43 billion.

“Nevertheless, operating income ended the third quarter of 2012 22.87 percent higher at SYP 10.19 billion, thanks to the SYP 2.96 billion unrealized foreign exchange gains. On the other hand, consolidated net operating profits plunged by 85.72 percent to SYP 304.73 million owing to the SYP 3.73 billion increase in operating expenses,” the report said.

On the balance sheet front, the consolidated assets of all seven banks came in 3.9 percent lower during the first three quarters of 2012 at SYP 311.67 billion, with the share of Bank BEMO Saudi Fransi of consolidated assets standing at 26.01 percent, that of Bank of Syria & Overseas nearing 18.3 percent, Bank Audi Syria amassing 16.33 percent, Byblos Bank Syria controlling 14.96 percent, Fransabank Syria accounting for 10.35 percent, the share of Syria Gulf Bank surpassing 9.59 percent and that of Sharq Bank approaching 4.53 percent.

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