Lebanon’s banking sector employs 15,278 people or 1.2% of the labor force, and its contribution to the country’s GDP reaches 4.5%. Despite the gloomy economic picture, banks have continued to post profits, mainly from high rates on local treasury bills.

Operating banks and branches

At the end of 2002, 63 banks were operating in Lebanon with 790 branches throughout the country. In comparison, there were 68 banks with 780 branches at the close of the previous year while in 1992, the number of registered banks stood at 84 (only 73 were in operation) with 512 available branches.

The Central Bank has encouraged a policy of mergers and acquisitions which has seen 25 such operations between the years 1994-2002, leading to the decrease in the number of banks, as shown in Table 1. However, the majority of branches remain concentrated in the cities, with 451 (57%) located in the Greater Beirut area.

Banking sector deposits

Deposits amounted to LL 64,865 billion ($43 billion) at the end of 2002, an increase of LL 3,825 billion ($2.5 billion) or 6.2% from the previous year. 84.5% of deposits originate from resident private deposits with 14.8% from non-resident private deposits, while a mere 0.7% come from the public sector.

Private sector deposits amount to LL 64,400 billion ($42.6 billion), with 69.4% in foreign currency ($29.4 billion) and LL 19,700 billion or 30.6% in local currency. Compared to 1992, deposits from the private sector have increased by LL 42,332 billion or 434%.

As shown in Table 2 on the following page, foreign currency deposits make up the largest proportion of deposits, or an average of 65.4% for the years shown. The lowest ratio recorded was in 1996 (56.5%) and the highest was in 2001 (72.5%) with political and economic instability continuing to be a major factor in the high proportion of foreign currency deposits. ...Full Story