According to BDL statistics, the combined balance sheet of commercial banks operating in Lebanon rose by around six-folds (LBP 1,433.82 trillion) in the first eleven months of 2023 to LBP 1,688.68 trillion, up from LBP 254.85 trillion in December 2022. This increase owes to the adoption of the new official exchange rate of LBP 15,000 per USD starting the month of February 2023 instead of LBP 1,507.5 previously. On an annual basis, moreover, the combined assets of the resident banking sector came in more than six-folds (LBP 1,439.87 trillion) higher than the LBP 248.81 trillion reading reported at end of November 2022.

On the funding side of the balance sheet, customer deposits increased by 633.82% (LBP 1,245.93 trillion) YTD November 2023 to LBP 1,442.50 trillion. More specifically, deposits of the resident private sector increased by 617.57% (LBP 952.59 trillion) to LBP 1,106.84 trillion with deposits of the non-resident private sector rising by 800.90% (LBP 282.48 trillion) to LBP 317.75 trillion. In addition, public sector deposits increased by 153.82% (LBP 10.85 trillion) to LBP 17.91 trillion. From a currency denomination standpoint, deposits in Lebanese Pounds increased by 39.69% (LBP 20.81 trillion) to LBP 73.24 trillion, while foreign currency deposits decreased by 4.53% ($4.33 billion) to $91.28 billion. In this context, the deposit dollarization rate stood at 96.39% as at end of November 2023 in comparison with 76.25% in December 2022 mainly owing to the change in the official exchange rate. On an annual basis, total customer deposits widened by 640.93% (LBP 1,247.81 trillion) from a reading of LBP 194.69 trillion at end of November 2022.

On the lending front, loans to the private sector (residents and non-residents) reached LBP 127.95 trillion in November 2023, registering an increase of LBP 97.72 trillion (323.28%) from December 2022’s reading of LBP 30.23 trillion. More specifically, LBP denominated loans fell by 18.71% (LBP 2.79 trillion) YTD November 2023 to LBP 12.12 trillion and foreign currency loans receded by 24.03% ($2.44 billion) to $7.72 billion. The ratio of loans to deposits attained 8.87% by November 2023 compared to 15.38% at end of 2022 and 16.49% in November 2022. More specifically, the ratio of LBP-denominated private sector loans to LBP deposits stood at 16.55% in November 2023, in comparison with 28.43% at year-end 2022 and 32.06% at end of November 2022. On the other hand, the ratio of foreign currency-denominated private sector loans to foreign currency deposits fell to 8.44% at end of November 2023 from 10.60% at end of December 2022 and 11.17% in November 2022.

The consolidated capital accounts of commercial banks operating in Lebanon, restated at the new official exchange rate, expanded by 4.68% (LBP 3.48 trillion) during the month of November 2023 to LBP 77.91 trillion  noting that they rose by 182.59% (LBP 50.34 trillion) when compared to December’s reading of LBP 27.57 trillion. The increase in capital accounts in November is commensurate with the LBP 3.48 trillion rise in tangible assets as banks are continuing to book gains from the revaluation of their real estate portfolios.  It is worth noting that capital accounts also increased by LBP 3.71 trillion in October (backed also by revaluation gains) while they contracted by LBP 56.86 trillion during the months of August and September mainly owing to the provisions of BDL circular 677 which suspended the provisions of some articles of circulars 675 & 676 that previously permitted banks to book FX losses under regularization accounts on the asset side of the balance sheet instead of reporting them under equity. Hence, banks that benefited from the provisions of the aforementioned circulars which translated into an increase in equity by an amount equivalent to LBP 49.14 trillion between the months of June and July 2023 had to reverse these entries and book these FX positions as losses.