According to Banque Du Liban (BDL) statistics, the combined balance sheet of investment banks operating in Lebanon narrowed by 3.84% during the first nine months of 2020 to nearly $4.94 billion, down from $5.14 billion at end of 2019. In details, cash and deposits with Central Banks dropped by 9.49% to $1.44 billion, accompanied by a 9.14% contraction in the value of securities portfolio to $827 million, which altogether outweighed the 0.54% rise in claims on the private sector (comprising resident and non-resident customers) to $2.17 billion and some 44.18% increase in claims on the non-resident financial sector to $90 million. On the liabilities side, private sector deposits (resident and non-resident customers, in addition to the resident financial sector) fell by 13.22% in the first nine months of 2020 to around $1.64 billion, accompanied by a 40.35% drop in liabilities to the public sector to $38 million, outweighing the 2.30% increase in investment banks’ capital accounts to $1.77 billion, the 3.01% rise in other liabilities to $1.25 billion and a 0.95% uptick in the liabilities to the non-resident financial sector to $215 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 $2.17 billion by end of September 2020.