The Lebanese Central Bank’s quarterly bulletin shows some 40.77% depreciation in the net value of the securities portfolio on the books of the Lebanese financial sector (banks and financial institutions) during the first nine months of the year 2020 to LBP 1,887.8 billion ($1.25 billion), from LBP 3,187.0 billion ($2.11 billion) at year-end 2019. On an annual basis, the net value of securities portfolio held by the financial sector plunged by 51.28% from LBP 3,874.9 billion ($2.57 billion) at end of September 2019. In details, the value of equity securities, which constituted 62.33% of the Lebanese financial sector’s net securities portfolio, contracted by 35.99% year-to-date and by 48.35% annually to LBP 1,176.6 billion ($0.78 billion). Concurrently, long-term debt securities, which represented some 37.44% of the sector’s net securities portfolio, fell by 47.33% since the beginning of the year and by 55.04% y-o-y to LBP 706.8 billion ($0.47 billion).

Commercial banks controlled the lion’s share (33.51%) of the financial sector’s placements in equity securities, followed by medium & long-term banks (33.28%) and financial institutions (18.40%). Commercial banks also detained the largest stake (41.67%) of the financial sector’s placements in long-term debt securities, trailed, and by far, by insurance companies (26.45%) and medium & long-term banks (23.84%).

From an asset allocation standpoint, the Lebanese financial sector’s securities portfolio was majority concentrated in U.S. equity instruments (29.07%), U.S. long-term debt securities (19.37%), and U.S. short-term debt securities (38.64%). The allocation of the investment portfolio by type of instrument across other countries at end of September 2020 is sketched in the table below: