According to BDL statistics, the combined balance sheet of commercial banks operating in Lebanon contracted by 2.97% (LBP 9,714 billion) during the first two months of the year 2020 to LBP 317,083 billion ($210.34 billion), down from LBP 326,797 billion ($216.78 billion) in December 2019. On an annual basis, the combined assets of the resident banking sector came in 15.95% lower than the LBP 377,237 billion ($250.24 billion) reading reported at end of February of last year. This drop comes as a result of banks offsetting their LBP loans from BDL with their respective similar maturity LBP placements with the Central Bank emanating from financial engineering transactions in order to conform with International Financial Reporting Standards (IFRS) together with the sizeable drop in the loans portfolio.

On the funding side of the balance sheet, customer deposits fell by 4.40% (LBP 10,873 billion) during the first two months of 2020 to LBP 235,992 billion ($156.55 billion) bearing in mind that they also fell by $3.61 billion in December and by $5.86 billion in November 2019. This comes on the back of the bank run witnessed in the aftermath of the social uprising and resignation of the Lebanese government. This YTD contraction came as a result of the 3.95% (LBP 7,536 billion) drop in the deposits of the resident private sector to LBP 183,030 billion ($121.41 billion), accompanied by a 6.63% (LBP 3,245 billion) decrease in the deposits of the non-resident private sector to LBP 45,675 billion ($30.30 billion). In addition, public sector deposits dropped by 1.26% (LBP 93 billion) to LBP 7,286 billion ($4.83 billion). From a currency denomination standpoint, deposits in Lebanese Pounds receded by 9.79% (LBP 6,343 billion) during the first two months of 2020 to LBP 58,455 billion ($38.78 billion), with foreign currency deposits also dropping by 2.49% (LBP 4,530 billion) to LBP 177,536 billion ($117.77 billion). In this context, the deposit dollarization rate increased to 77.63% by end of February in comparison with 76.02% as at end of 2019 and 70.60% at end of February of the previous year. On an annual basis, total customer deposits narrowed by 11.26% from LBP 265,944 billion ($176.41 billion) in February 2019.

On the lending front, loans to the private sector (residents and non-residents) receded by 7.41% (LBP 5,561 billion) during the first two months of 2020 to LBP 69,465 billion ($46.08 billion), down from LBP 75,027 billion ($49.77 billion) in December 2019. The loans portfolio also sank by 19.70% on an annual basis, resulting in a ratio of net loans to customer deposits of 29.44%, compared to 30.39% at end of 2019 and 32.53% in February 2019. More specifically, the ratio of LBP-denominated private sector loans to LBP deposits stood at 39.30% by end of February 2020, in comparison with 36.23% at year-end 2019 and 32.20% at end of February 2019. On the other hand, the ratio of foreign currency-denominated private sector loans to foreign currency deposits fell to 26.19% at end of February 2020 from 28.31% at end of December and 32.68% in February 2019.

The consolidated capital accounts of commercial banks operating in Lebanon rose to around LBP 31,294 billion ($20.76 billion) at end of February 2020, compared to LBP 31,240 billion ($20.72 billion) at end of 2019 yet came in lower than the LBP 33,403 billion ($22.16 billion) reported at end of February 2019.