According to BDL statistics, the combined balance sheet of commercial banks operating in Lebanon contracted by 13.11% (LBP 49,300 billion) during the year 2019 to LBP 326,797 billion ($216.78 billion), down from LBP 376,097 billion ($249.48 billion) in December 2018. This drop comes as a result of banks offsetting their LBP loans from BDL with their respective similar maturity LBP placements with BDL arising from financial engineering transaction with the Central Bank in order to conform with International Financial Reporting Standards (IFRS).  

On the funding side of the balance sheet, customer deposits fell by 8.29% (LBP 22,309 billion) in 2019 to LBP 246,865 billion ($163.76 billion), and by 2.16% ($3.61 billion) in December alone, bearing in mind that they also contracted by 3.38% ($5.85 billion) in November. This comes on the back of the bank run witnessed in the aftermath of the protests and resignation of the Lebanese government. This annual contraction came as a result of the 7.43% (LBP 15,293 billion) drop in the deposits of the resident private sector to LBP 190,566 billion ($126.41 billion), accompanied by a 13.98% (LBP 7,950 billion) decrease in the deposits of the non-resident private sector to LBP 48,920 billion ($32.45 billion). On the other hand, public sector deposits increased by 14.50% (LBP 934 billion) to LBP 7,379 billion ($4.89 billion). From a currency denomination standpoint, deposits in Lebanese Pounds receded by 22.53% (LBP 18,843 billion) during the year 2019 to LBP 64,799 billion ($42.98 billion), with foreign currency deposits also dropping by 1.87% (LBP 3,466 billion) to LBP 182,066 billion ($120.77 billion). In this context, the deposit dollarization rate increased to 76.02% by end of December in comparison with 70.62% at end of 2018.

On the lending front, loans to the private sector (residents and non-residents) plunged by 16.19% (LBP 14,497 billion) during the year 2019 to LBP 75,027 billion ($49.77 billion), down from LBP 89,524 billion ($59.39 billion) in December 2018. As a result, the ratio of net loans to customer deposits stood at 30.39%, compared to 33.26% at end of 2018. More specifically, the ratio of LBP-denominated private sector loans to LBP deposits stood at 36.23% by end of 2019, in comparison with 32.95% at year-end 2018. On the other hand, the ratio of foreign currency-denominated private sector loans to foreign currency deposits fell to 28.31%, from 33.40% in December 2018.

The consolidated capital accounts of commercial banks operating in Lebanon rose to around LBP 31,240 billion ($20.72 billion) at end of year 2019, compared to LBP 30,382 billion ($20.15 billion) at end of 2018. This can be explained by banks’ continuous reinforcement of their capital base in order to meet BDL’s solvency requirement thresholds.