According to Banque Du Liban (BDL) statistics, the combined balance sheet of investment banks operating in Lebanon narrowed by 1.46% during the first quarter of 2021 to $4.49 billion, down from $4.56 billion at end of 2020. In details, cash and deposits with Central Banks contracted by 1.40% to $1.34 billion, coupled with a 2.55% decrease in the claims on the private sector (comprising resident and non-resident customers) to $1.92 billion, a 0.95% drop in the value of securities portfolio to around $674 million and a 32.84% drop in claims on the public sector to $7 million, altogether outweighing the 13.89% rise in claims on the non-resident financial sector to $103 million and the 2.07% increase in the value of other assets to $80 million, only to name a few. On the liabilities side, private sector deposits (resident and non-resident customers, in addition to the resident financial sector) fell by 5.61% YTD March 2021 to around $1.48 billion, accompanied by a 3.08% drop in liabilities to the non-resident financial sector to $186 million and a 0.13% contraction in the value of other liabilities to $1.24 billion, which altogether outweighed the 1.89% rise in investment banks’ capital accounts to $1.56 billion.

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 $1.91 billion by end of March 2021.