According to BDL statistics, the combined balance sheet of commercial banks operating in Lebanon contracted by 0.69% (LBP 1,822 billion) during the first two months of the year 2022 to LBP 261,895 billion ($173.73 billion), down from LBP 263,717 billion ($174.94 billion) in December 2021. On an annual basis, moreover, the combined assets of the resident banking sector came in 7.66% lower than the LBP 283,609 billion ($188.13 billion) reading reported at end of February 2021. 

On the funding side of the balance sheet, customer deposits fell by 0.94% (LBP 1,900 billion) during the first two months of 2022 to LBP 200,813 billion ($133.21 billion) bearing in mind that they dropped by $38.76 billion since the onset of October’s social uprising up until end of year 2021. 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 0.51% (LBP 806 billion) to LBP 157,373 billion ($104.39 billion) and were accompanied by a 1.31% contraction in deposits of the non-resident private sector to LBP 36,513 billion ($24.22 billion). In addition, public sector deposits fell by 8.11% (LBP 611 billion) by end of February 2022 to LBP 6,927 billion ($4.60 billion). From a currency denomination standpoint, deposits in Lebanese Pounds fell by 0.35% (LBP 166 billion) in the first two months of 2022 to LBP 47,543 billion ($31.54 billion), while foreign currency deposits dropped by 1.12% (LBP 1,733 billion) to LBP 153,269 billion ($101.67 billion). In this context, the deposit dollarization sustained its downturn to reach 79.05% as at end of February in comparison with 79.42% in December 2021 and 80.04% in February 2021. On an annual basis, total customer deposits narrowed by 7.77% (LBP 16,929 billion) from a reading of LBP 217,742 billion ($144.44 billion) at end of February 2021.

On the lending front, loans to the private sector (residents and non-residents) receded by 3.69% (LBP 1,540 billion) during the first two months of 2022 to LBP 40,236 billion ($26.69 billion), down from LBP 41,776 billion ($27.71 billion) in December 2021. 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 24.80% on an annual basis, resulting in a ratio of net loans to customer deposits of 20.04% at end of February 2022, compared to 20.61% at end of 2021 and 24.57% in February 2021. More specifically, the ratio of LBP-denominated private sector loans to LBP deposits stood at 37.59% in February 2022, in comparison with 38.30% at year-end 2021 and 43.14% at end of February 2021. On the other hand, the ratio of foreign currency-denominated private sector loans to foreign currency deposits fell to 14.59% at end of February 2022 from 15.16% at end of December and 19.01% in February 2021.

The consolidated capital accounts of commercial banks operating in Lebanon rose by $80.05 million (0.50%) in February of the current year to LBP 24,161 billion ($16.03 billion), noting that they fell by $1.71 billion in the first two months of 2022 owing to the losses incurred by the sector during the year 2021.