According to BDL statistics, the combined balance sheet of commercial banks operating in Lebanon contracted by 7.24% (LBP 23,647 billion) during the first half of the current year to LBP 303,150 billion ($201.09 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 21.44% lower than the LBP 385,891 billion ($255.98 billion) reading reported at end of June of last year. This drop is partly attributed to banks offsetting their LBP loans from BDL with their respective similar maturity LBP placements with the Central Bank associated with financial engineering transactions with the latter in order to conform with International Financial Reporting Standards (IFRS) not to mention the sizeable drop in the loans portfolio.

On the funding side of the balance sheet, customer deposits fell by 8.80% (LBP 21,730 billion) during the first half of 2020 to LBP 225,134 billion ($149.34 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 previous government. This YTD contraction came as a result of the 8.10% (LBP 15,436 billion) drop in the deposits of the resident private sector to LBP 175,130 billion ($116.17 billion), accompanied by a 12.70% (LBP 6,213 billion) decrease in the deposits of the non-resident private sector to LBP 42,707 billion ($28.33 billion). In addition, public sector deposits dropped by 1.10% (LBP 81 billion) to LBP 7,298 billion ($4.84 billion). From a currency denomination standpoint, deposits in Lebanese Pounds receded by 20.94% (LBP 13,568 billion) by June 2020 to LBP 51,230 billion ($33.98 billion), with foreign currency deposits also dropping by 4.48% (LBP 8,162 billion) to LBP 173,903 billion ($115.36 billion). In this context, the deposit dollarization rate increased to 79.83% as at end of June in comparison with 76.02% as at end of 2019 and 71.49% at end of June of the previous year. On an annual basis, total customer deposits narrowed by 15.60% from LBP 266,753 billion ($176.95 billion) at end of June 2019.

On the lending front, loans to the private sector (residents and non-residents) receded by 16.78% (LBP 12,589 billion) during the first half of June 2020 to LBP 62,437 billion ($41.42 billion), down from LBP 75,027 billion ($49.77 billion) in December 2019. The loans portfolio also sank by 26.04% on an annual basis, resulting in a ratio of net loans to customer deposits of 27.73% at end of June 2020, compared to 30.39% at end of 2019 and 31.65% in June 2019. More specifically, the ratio of LBP-denominated private sector loans to LBP deposits stood at 44.34% by end of June 2020, in comparison with 36.23% at year-end 2019 and 31.19% at end of June 2019. On the other hand, the ratio of foreign currency-denominated private sector loans to foreign currency deposits fell to 22.84% at end of June 2020 from 28.31% at end of December and 31.85% in June 2019.

The consolidated capital accounts of commercial banks operating in Lebanon dropped by 5.62% YTD June 2020 to around LBP 29,484 billion ($19.56 billion) and came in lower than the LBP 31,491 billion ($20.89 billion) reading reported at end of June 2019.