According to Banque Du Liban (BDL) statistics, the combined balance sheet of investment banks operating in Lebanon narrowed by 4.14% during the first half of 2021 to $4.37 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 3.22% to $1.90 billion, coupled with a 4.43% drop in cash and deposits with Central Banks to $1.30 billion, a 41.09% plunge in claims on the non-resident financial sector to $53 million and a 2.29% decrease in the value of the securities portfolio to $665 million, altogether outweighing the 3.78% increase in the value of other assets to $81 million. On the liabilities side, private sector deposits (resident and non-resident customers, in addition to the resident financial sector) fell by 8.55% YTD June 2021 to around $1.43 billion, accompanied by a 28.24% drop in liabilities to the non-resident financial sector to $138 million and a 69.03% contraction in liabilities to the public sector to $6 million among others, which altogether outweighed the 1.78% 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 $1.90 billion by end of June 2021.