According to BDL statistics, the combined balance sheet of commercial banks operating in Lebanon contracted by 1.87% (LBP 5,298 billion) during the first four months of the year 2021 to LBP 278,176 billion ($184.53 billion), down from LBP 283,474 billion ($188.04 billion) in December 2020. On an annual basis, moreover, the combined assets of the resident banking sector came in 10.32% lower than the LBP 310,173 billion ($205.75 billion) reading reported at end of April of last year.

On the funding side of the balance sheet, customer deposits fell by 1.91% (LBP 4,174 billion) during the first four months of 2021 to LBP 213,842 billion ($141.85 billion) bearing in mind that they dropped by $28.61 billion since the onset of October’s social uprising up until end of year 2020. This comes on the back of the bank run witnessed in the aftermath of the ongoing social tensions and fear of a haircut on deposits. More specifically, deposits of the resident private sector fell by 2.32% (LBP 3,910 billion) to LBP 164,609 billion ($109.19 billion), coupled with a 1.92% contraction in deposits of the non-resident private sector to LBP 40,441 billion ($26.83 billion). However, public sector deposits increased by 6.39% (LBP 528 billion) during the first four months of 2021 to LBP 8,792 billion ($5.83 billion). From a currency denomination standpoint, deposits in Lebanese Pounds contracted by 1.05% (LBP 522 billion) by April 2021 to LBP 48,924 billion ($32.45 billion), while foreign currency deposits dropped by 2.17% (LBP 3,653 billion) to LBP 164,918 billion ($109.40 billion). In this context, the deposit dollarization rate stood at 80.43% as at end of April in comparison with 80.37% in December 2020 and 78.94% in April 2020. On an annual basis, total customer deposits narrowed by 6.84% from LBP 229,538 billion ($152.26 billion) at end of April 2020.

On the lending front, loans to the private sector (residents and non-residents) receded by 8.45% (LBP 4,605 billion) during the first four months of 2021 to LBP 49,918 billion ($33.11 billion), down from LBP 54,523 billion ($36.17 billion) in December 2020. This drop in the loans portfolio partly owes to the early settlement of some loans from related customers’ deposits through a netting process in fear of a haircut on deposits or a formal devaluation of the currency. The loans portfolio also sank by 24.57% on an annual basis, resulting in a ratio of net loans to customer deposits of 23.34% at end of April 2021, compared to 25.01% at end of 2020 and 28.83% in April 2020. More specifically, the ratio of LBP-denominated private sector loans to LBP deposits stood at 41.83% in April 2021, in comparison with 44.55% at year-end 2020 and 42.25% at end of April 2020. On the other hand, the ratio of foreign currency-denominated private sector loans to foreign currency deposits fell to 17.86% at end of April 2021 from 19.28% at end of December and 24.70% in April 2020.

The consolidated capital accounts of commercial banks operating in Lebanon dropped by $2.96 billion in the first four months of 2021 to LBP 25,588 billion ($16.97 billion), mainly owing to the losses incurred by the sector during the year 2020.