According to BDL statistics, the combined balance sheet of commercial banks operating in Lebanon contracted by 1.28% (LBP 3,377 billion) during the first quarter of the year 2022 to LBP 260,340 billion ($172.70 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 7.28% lower than the LBP 280,790 billion ($186.26 billion) reading reported at end of March 2021.

On the funding side of the balance sheet, customer deposits fell by 1.67% (LBP 3,381 billion) during the first quarter of 2022 to LBP 199,332 billion ($132.23 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 0.87% (LBP 1,383 billion) to LBP 156,796 billion ($104.01 billion) and were accompanied by a 1.84% (LBP 679 billion) contraction in the deposits of the non-resident private sector to LBP 36,317 billion ($24.09 billion). In addition, public sector deposits dropped by 17.50% (LBP 1,319 billion) in the first quarter of 2022 to LBP 6,219 billion ($4.13 billion). From a currency denomination standpoint, deposits in Lebanese Pounds fell by 0.68% (LBP 323 billion) in the first three months of 2022 to LBP 47,386 billion ($31.43 billion), while foreign currency deposits dropped by 1.97% (LBP 3,058 billion) to LBP 151,945 billion ($100.79 billion). In this context, the deposit dollarization sustained its downturn to reach 78.68% as at end of March in comparison with 79.42% in December 2021 and 80.24% in March 2021. On an annual basis, total customer deposits narrowed by 7.34% (LBP 15,782 billion) from a reading of LBP 215,114 billion ($142.70 billion) at end of March 2021.

On the lending front, loans to the private sector (residents and non-residents) receded by 6.31% (LBP 2,638 billion) during the first quarter of 2022 to LBP 39,138 billion ($25.96 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 24.09% on an annual basis, resulting in a ratio of net loans to customer deposits of 19.63% at end of March 2022, compared to 20.61% at end of 2021 and 23.97% in March 2021. More specifically, the ratio of LBP-denominated private sector loans to LBP deposits stood at 36.84% in March 2022, in comparison with 38.30% at year-end 2021 and 42.48% at end of March 2021. Concurrently, the ratio of foreign currency-denominated private sector loans to foreign currency deposits fell to 14.27% at end of March 2022 from 15.16% at end of December and 18.44% in March 2021.

The consolidated capital accounts of commercial banks operating in Lebanon rose by $184.19 million (1.15%) in March of the current year to LBP 24,438 billion ($16.21 billion), noting that they fell by 8.61% ($1.53) billion in the first quarter of 2022.