According to BDL statistics, the combined balance sheet of commercial banks operating in Lebanon contracted by 5.59% (LBP 14,737 billion) during the first eleven months of the year 2022 to LBP 248,810 billion ($165.05 billion), down from LBP 263,547 billion ($174.82 billion) in December 2021. On an annual basis, moreover, the combined assets of the resident banking sector came in 6.01% lower than the LBP 264,712 billion ($175.60 billion) reading reported at end of November 2021. 

On the funding side of the balance sheet, customer deposits fell by 3.96% (LBP 8,024 billion) during the first eleven months of 2022 to LBP 194,689 billion ($129.15 billion) bearing in mind that they dropped by $38.76 billion since the onset of November’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 3.59% (LBP 5,682 billion) to LBP 152,496 billion ($101.16 billion) and were accompanied by a 4.58% (LBP 1,696 billion) contraction in the deposits of the non-resident private sector to LBP 35,300 billion ($23.42 billion). In addition, public sector deposits fell by 8.57% (LBP 646 billion) up to November 2022 to LBP 6,892 billion ($4.57 billion). From a currency denomination standpoint, deposits in Lebanese Pounds rose by 3.37% (LBP 1,609.59 billion) YTD November 2022 to LBP 49,319 billion ($32.72 billion), while foreign currency deposits dropped by 6.21% (LBP 9,633 billion) to LBP 145,369 billion ($96.43 billion). In this context, the deposit dollarization rate sustained its downturn to reach 77.41% as at end of November in comparison with 79.42% in December 2021 and 79.96% in November 2021. On an annual basis, total customer deposits narrowed by 3.91% (LBP 7,921 billion) from a reading of LBP 202,610 billion ($134.40 billion) at end of November 2021.

 n the lending front, loans to the private sector (residents and non-residents) receded by 23.18% (LBP 9,683 billion) during the first eleven months of 2022 to LBP 32,098 billion ($21.29 billion), down from LBP 41,781 billion ($27.72 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 24.06% on an annual basis, resulting in a ratio of net loans to customer deposits of 16.49% at end of November 2022, compared to 20.61% at end of 2021 and 20.86% in November 2021. More specifically, the ratio of LBP-denominated private sector loans to LBP deposits stood at 32.06% in November 2022, in comparison with 38.31% at year-end 2021 and 39.11% at end of November 2021. On the other hand, the ratio of foreign currency-denominated private sector loans to foreign currency deposits fell to 11.20% at end of November 2022 from 15.16% at end of December and 15.43% in November 2021.

The consolidated capital accounts of commercial banks operating in Lebanon contracted by $340.61 million (1.35%) in November of the prior year to LBP 24,772 billion ($16.43 billion), noting that they contracted by $1.35 billion in the first eleven months of 2022 as the year 2021 losses of around $1.79 billion which were booked in January were cushioned by profits registered in February, March, April, May, June and October of the year.