According to BDL statistics, the combined balance sheet of commercial banks operating in Lebanon rose by around six-folds (LBP 1,473.89 trillion) in the year 2023 to reach LBP 1,728.74 trillion at end of December, 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 the funding side of the balance sheet, customer deposits increased by 632.31% (LBP 1,242.95 trillion) in the full year 2023 to LBP 1,439.53 trillion. More specifically, deposits of the resident private sector increased by 615.86% (LBP 949.96 trillion) to LBP 1,104.21 trillion with deposits of the non-resident private sector rising by 798.91% (LBP 281.78 trillion) to LBP 317.05 trillion. In addition, public sector deposits increased by 159.01% (LBP 11.22 trillion) to LBP 18.27 trillion. From a currency denomination standpoint, deposits in Lebanese Pounds increased by 34.13% (LBP 17.89 trillion) to LBP 70.32 trillion, while foreign currency deposits decreased by 4.54% ($4.34 billion) to $91.28 billion. In this context, the deposit dollarization rate reached 96.62% at end of December 2023 in comparison with 76.25% in December 2022 mainly owing to the change in the official exchange rate.

On the lending front, loans to the private sector (residents and non-residents) reached LBP 124.82 trillion in December 2023, registering an increase of LBP 94.59 trillion (312.93%) from December 2022’s reading of LBP 30.23 trillion. More specifically, LBP denominated loans fell by 23.60% (LBP 3.52 trillion) in 2023 to LBP 11.39 trillion and foreign currency loans receded by 25.60% ($2.60 billion) to $7.56 billion. The ratio of loans to deposits attained 8.67% by December 2023 compared to 15.38% at end of 2022. More specifically, the ratio of LBP-denominated private sector loans to LBP deposits stood at 16.19% in December 2023, in comparison with 28.43% at year-end 2022 while the ratio of foreign currency-denominated private sector loans to foreign currency deposits fell to 8.26% at end of December 2023 in comparison with 10.60% at end of December 2022.

The consolidated capital accounts of commercial banks operating in Lebanon, restated at the new official exchange rate, contracted by 1.97% (LBP 1.53 trillion) during the month of December 2023 alone to LBP 76.37 trillion  noting that they rose by 177.03% (LBP 48.81 trillion) in the full year 2023 when benchmarked to December 2022’s reading of LBP 27.57 trillion. The drop in capital accounts in December comes in spite of the LBP 31.30 trillion rise in tangible assets (as banks are continuing to book gains from the revaluation of their real estate portfolios), which most likely failed to offset the losses registered by the banking sector in the month of December. It is worth noting that capital accounts also increased by around LBP 7.19 trillion in October & November (on the back of real estate revaluation surpluses ) 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.