According to BDL statistics, the combined balance sheet of commercial banks operating in Lebanon contracted by 4.45% (LBP 12,603 billion) during the first nine months of the year 2021 to LBP 270,871 billion ($179.68 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 6.69% lower than the LBP 290,295 billion ($192.57 billion) reading reported at end of September of last year.

On the funding side of the balance sheet, customer deposits fell by 4.80% (LBP 10,473 billion) during the first nine months of 2021 to LBP 207,543 billion ($137.67 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 4.69% (LBP 7,899 billion) to LBP 160,620 billion ($106.55 billion), coupled with a 5.16% contraction in deposits of the non-resident private sector to LBP 39,106 billion ($25.94 billion). In addition, public sector deposits fell by 5.41% (LBP 447 billion) during the first nine months of 2021 to LBP 7,817 billion ($5.19 billion). From a currency denomination standpoint, deposits in Lebanese Pounds contracted by 3.59% (LBP 1,776 billion) by September 2021 to LBP 47,669 billion ($31.62 billion), while foreign currency deposits dropped by 5.16% (LBP 8,697 billion) to LBP 159,873 billion ($106.05 billion). In this context, the deposit dollarization rate stood at 80.05% as at end of September in comparison with 80.37% in December 2020 and 80.22% in September 2020. On an annual basis, total customer deposits narrowed by 6.56% from LBP 222,106 billion ($147.33 billion) at end of September 2020.

On the lending front, loans to the private sector (residents and non-residents) receded by 17.05% (LBP 9,299 billion) during the first nine months of 2021 to LBP 45,244 billion ($30.00 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 22.29% on an annual basis, resulting in a ratio of net loans to customer deposits of 21.79% at end of September 2021, compared to 25.01% at end of 2020 and 26.20% in September 2020. More specifically, the ratio of LBP-denominated private sector loans to LBP deposits stood at 39.64% in September 2021, in comparison with 44.55% at year-end 2020 and 44.65% at end of September 2020. On the other hand, the ratio of foreign currency-denominated private sector loans to foreign currency deposits fell to 16.47% at end of September 2021 from 19.28% at end of December and 20.82% in September 2020.

The consolidated capital accounts of commercial banks operating in Lebanon dropped by $3.02 billion in the first nine months of 2021 to LBP 25,487 billion ($16.91 billion), mainly owing to the losses incurred by the sector during the year 2020 and up until September 2021.