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Financial System Overview

Despite the global and regional economic challenges, Lebanon’s economic growth remained positive and registered a real GDP growth registered a 1% in 2015.

 

In 2015, the Lebanese banking sector’s performance remains robust with total assets of banks exceeding USD 186 billion and registering a 6% increase from 2014 levels. 

Deposits of commercial banks accounted for 302.7% of GDP in 2015, or the equivalent of USD 155 billion, increasing by 7.34% from 2014 levels. 

 

In parallel, lending activity registered 6.4% growth during 2015, with total credit to the private sector exceeding USD 55 billion. The detailed breakdown of these loans shows that individual loans still grasped the lion’s share of 30.7% followed by contracting and construction (18%) and Wholesale Trade (15.5%).

 

SECTORIAL COMPOSITIONS OF LOANS GRANTED IN THE FINANCIAL SECTOR (Up to July 2015)

SECTORIAL COMPOSITIONS OF LOANS GRANTED IN THE FINANCIAL SECTOR (Up to July 2015) 
Source: Central Bank of Lebanon

 

Given the positive results of the first stimulus package put in place in 2013, an addition stimulus package was put in place for the third consecutive year, with an average of more than USD 1 billion per year. These credit incentives, provided through the Lebanese commercial banking sector have played a key role in boosting and fostering traditional sectors through productive loans; developing the knowledge economy through Circular 331 equity financing scheme; supporting the creative media industry through guaranteed loans ratified by BDL circular 416.

Financial soundness indicators were maintained at satisfactory levels. In particular, the soundness of the Lebanese banking sector remained strong (23rd, ahead of Japan, United States and Germany).

 

SOUNDNESS OF BANKS (2015)

SOUNDNESS OF BANKS (2015) 
Note: Standing among 139 countries. Ranking on the degree of soundness of financial institutions

Source: World Competitiveness Report 2015-2016

 

In addition to that, remittances inflows of Lebanese expatriates remain important and continue to play a significant role in supporting the solvency of the country’s banking system. In 2015, Lebanon with USD 7.5 billion of remittances was the 17th largest recipient of remittances in the world and the 2nd largest recipient among 19 Arab countries.

 

TOP REMITTANCE-RECEIVING COUNTRIES  (2015|USD billion)

TOP REMITTANCE- RECEIVING COUNTRIES IN 2015 (USD billion) 
Source: Migration and Remittances Fact book 2016

 

In relative terms when accounting for country’s size and GDP Lebanon remains on the top of the list, with remittances accounting for 16.2% of GDP, the 18th highest ratio in the world and the second among the Arab economies in 2014.

 

REMITTANCE INFLOWS AS A % OF GDP (% share|2015)

REMITTANCE INFLOWS AS A % OF GDP (%share|2015) 
Source: Migration and Remittances Fact Book 2016

Get in Touch
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