According to Banque Du Liban (BDL) statistics, the combined balance sheet of investment banks operating in Lebanon narrowed by 2.32% during the first five months of 2021 to $4.45 billion, down from $4.56 billion at end of 2020. In details, claims on the private sector (comprising resident and non-resident customers) fell by 5.22% to $1.86 billion, coupled with a 6% drop in claims on the non-resident financial sector to $85 million and a 33.55% drop in claims on the public sector to $7 million, altogether outweighing the 0.44% rise in cash and deposits with Central Banks to $1.37 billion, the 0.58% hike in the value of securities portfolio to around $684 million and the 3.42% increase in the value of other assets to $81 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 8.80% YTD May 2021 to around $1.43 billion, accompanied by a 12.69% drop in liabilities to the non-resident financial sector to $168 million and a 45.55% contraction in liabilities to the public sector to $11 million, which altogether outweighed the 1.81% rise in investment banks’ capital accounts to $1.56 billion and the 3.09% increase in the value of other liabilities to $1.28 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 $1.86 billion by end of May 2021.