According to Banque Du Liban (BDL) statistics, the combined balance sheet of investment banks operating in Lebanon narrowed by 2.14% during the first quarter of 2020 to nearly $5.03 billion, down from $5.14 billion at end of 2019. In details, claims on the private sector (comprising resident and non-resident customers) dropped by 6.74% to $2.01 billion, coupled with a 2.62% contraction in the value of the securities portfolio to $886 million eclipsing the 3.14% rise in cash and deposits with Central Banks to $1.64 billion and some 9.62% increase in claims on the non-resident financial sector to $68 million. On the liabilities side, private sector deposits (resident and non-resident customers, in addition to the resident financial sector) fell by 8.13% in the first quarter of 2020 to just above $1.74 billion, accompanied by a 2.25% drop in other liabilities to $1.19 billion and a 13.40% drop in liabilities to the public sector to $55 million, outweighing the 3.89% increase in investment banks’ capital accounts to $1.80 billion and the 5.93% rise in the liabilities to the non-resident financial sector to $226 million.

Abiding by legislative decree number 50 and subsequent BDL circulars, investment banks operating in Lebanon have managed over the last couple of years to increase their lending activity to the private sector while reducing their exposure to the public sector. As a result, the surplus representing the difference between loans to the private sector and claims on the public sector reached $2.01 billion by end of March 2020.