Lebanon’s 3 largest banks flourish despite economic hurdles, turmoil - Zawya.com
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01 February 2012
BEIRUT: Lebanon’s three largest banks have managed to maintain relatively high profits in 2011 despite adverse economic conditions and mounting political and security tension in neighboring Syria, a BLOMBLOM
report said Tuesday.“
During 2011, the three largest Lebanese banks (BLOMBLOM, AudiAudi, and Byblos) proved highly resilient, growing their earnings in a year filled with uncertainty and dramatic changes in the region despite reporting a combined $94 million in net collective provisions,” BLOMBLOM added.
It noted that the events in neighboring Syria and the political disputes in Lebanon along with falling interest rates have set a challenging environment for Lebanese Banks.
“Nevertheless, these banks have been accustomed to operating in a turbulent environment, taking more precautions on average than banks in the region. This is reflected through their high Tier 1 capital, which has grown by 8.7 percent at BLOMBLOM, 4.3 percent at Byblos, and 0.9 percent at AudiAudi,” the report said.
On an individual basis, Bank AudiBank Audi
reported the highest absolute level of net profits at $365 million, growing by 3.7 percent over 2010. BLOM BankBLOM Bank came second, growing by 0.3 percent to reach net profits of $332 million, while Byblos profits grew by 1.2 percent to reach $180 million.“When looking at profitability ratios, which represent the bank’s ability to generate earnings from its equity and assets, BLOM BankBLOM Bank registered the highest rate of return on equity at 19.2 percent with a return on assets of 1.46 percent. Bank AudiBank Audi comes second with an ROE of 16.4 percent and an ROA of 1.27 percent, followed by Byblos Bank with an ROE of 13.6 percent and an ROA of 1.13 percent,” BLOMBLOM noted.
BLOM’s equity grew by 4.9 percent over 2010 to reach $1.98 billion while Byblos reported 1.1 percent growth in equity reaching $1.65 billion.
Audi’s equity slightly retreated by 2.7 percent to reach $2.35 billion.
Bank follows, growing its assets by 0.2 percent to reach $28.7 billion. However, its customer deposits mildly shrank by 0.2 percent to reach $24.8 billion,” the report said.The report stressed that BLOMBLOM was the most conservative in giving loans to the private sector, with a loans-to-deposits ratio of 27.5 percent, compared with 31.3 percent for Byblos and 34.7 percent for AudiAudi Bank.
All of these three banks have a strong presence in Syria and Egypt which are scenes of political turmoil.
© Copyright The Daily Star 2012.