Bank Audi published its 2020 annual report this week conveying a net after tax loss of $144.78 million, compared to a net loss of $602.12 million in 2019. Bank Audi noted that some $609 million of normalized net profit were booked in 2020, yet said figure was diluted by the impairments and other adjustments tied to the crisis. The Bank further attributed the 2020 results to the ambiguity surrounding Lebanon’s financial crisis for the past 16 months, coupled with the repercussions of the COVID-19 pandemic, the Beirut port explosion, the recession, hyperinflation and the availability of several exchange rates, which altogether have prevented the bank’s management from assessing the impact of the prevailing crisis on the bank’s financial position and equity prompting the external auditors to express an adverse opinion. In details, the bank reported some 5.45% y-o-y drop in net interest income to $881.14 million coupled with some 464.81% contraction in net fee & commission income to a loss of $520.00 million which were outweighed by the sizeable increase in net gains on financial instruments and other operating income to $148.69 million (up from $6.35 million in 2019) and the contraction in net impairment loss on financial assets from $1,211 million in 2019 to $174 million in 2020. The drop in net impairment loss on financial assets stems from the sale of a sizeable portion of Bank Audi’s exposure on Lebanese government Eurobonds, which fell from a nominal value of $1.98 billion in 2019 to a net value of $9.1 million in 2020 enabling the bank to release some $701 million in expected credit losses booked in 2019. Consequently, net operating income rose to $337.91 million in 2020, up from a net operating loss of $130.69 million a year earlier, with operating expenses contracting by 9.72% to $480.37 million. On the balance sheet front, the sale of Bank Audi’s operations in Egypt, Jordan, Iraq and its investment in Bank Audi Syria resulted in downsizing the bank’s operations, trimming its’ consolidated assets by 10.38% in the year 2020 to around $35.43 billion as a result of the 15.90% drop in cash and balances with central banks to $12.93 billion and the 40.71% contraction in net loans and advances to $6.14 billion. On the funding side of the balance sheet, customer deposits at Bank Audi narrowed by 27.25% in the year 2020 to just below $21.53 billion. Consequently, the bank’s ratio of net loans to customer deposits decreased to 28.50% by end of 2020, with its shareholders’ equity dropping by 0.63% to around $2.95 billion in spite of the $209 million increase in the bank’s capital to meet BDL’s the provisions of BDL circular 567. In addition, the bank’s annual report mentioned that Bank Audi booked dividends distributed by foreign entities amounting to $110 million (of which $30 million are in fresh dollars) in 2020, which when added to the aforementioned increase in capital, aggregates to a $319 million cash capital contribution in 2020. Accordingly, the bank managed to increase its total capital adequacy ratio calculated according to Basel III standards rising to 13.12% in 2020 (compared to a minimum requirement of 8% for 2020-2021), and its common equity Tier 1 ratio to 9.36% (compared to a minimum requirement of 4.5% for 2020-2021). From another standpoint, the group’s cost to income ratio fell from 45.72% in 2019 to 44.22% in 2020. Finally, the Bank stated that the proceeds from the disposal of its Egyptian, Jordanian, Iraqi and Syrian operations aggregated to $841 million (gain on discontinued operations of $66.50 million in 2020), thereby increasing stand-alone equity by $306 million (of which $291 million are in fresh dollars) and improving the bank’s foreign liquidity by $694 million.