Banque Du Liban’s recent Macroeconomic Review publication which covers the full year 2025 shed light on the current situation of the banking sector pointing out that the sector currently comprises 57 banks, of which 45 commercial (36 Lebanese-owned down from 38 at the start of the crisis and 9 foreign-owned) and 12 investment banks (down from 16 pre-crisis). The review added that banks were compelled into downsizing their operations as a result of the crisis, whether in terms of domestic branches which were reduced by 439 between 2019 and 2025 (41.5%) to 619 (and down by 2.21% in 2025 alone from 633 branches in 2024), ATM network which contracted by 571 machines between the years 2019 and 2025 (28.5%) to 1,432 (noting it increased by 1.42% in 2025 alone from 1,412 machines in 2024) or taskforce which fell by 12,099 employees (48.8% between 2019 and 2025) to 12,684. This is further outlined by the below table:

The crisis also had a profound impact on major elements of commercial banks’ balance sheet as highlighted by the below section:

-       Assets: According to BDL, the structure of commercial banks’ assets in 2025 is still heavily concentrated in placements with BDL, reaffirming the dominance of sovereign exposures on banks’ balance sheets. More specifically, currency and deposits at BDL are still the largest asset component standing at $77.5 billion in 2025 down from $79.6 billion in 2024, accounting for 76% of total assets. The securities portfolio fell from $7.1 billion in December 2024 to $6.7 billion in December 2025 (4.3% decline) mainly on the back of the contraction in the resident securities portfolio from $6.25 billion to $5.34 billion in 2025, which was partly offset by the increase in the non-resident securities portfolio from $805.1 million to $1,413.8 million over the same period.

-       Loans: BDL noted that credit creation is still largely impaired as evidenced by the 12.5% y-o-y contraction in total claims to $5.2 billion in December 2025 down from $5.9 billion in December 2024. The majority of loans (98%) are denominated in foreign currency while the remaining 2% is denominated in Lebanese Pound. The report noted that despite the 10% and 13% drops in LBP and USD claims in 2025, the pace of decline has dropped compared to the 29% contraction witnessed in 2024. In addition, total loans fell from $58.1 billion in January 2019 (23% of banking sector assets and 109% of GDP) to $5.2 billion in December 2025 (5.1% of assets and circa 16% of GDP). Concerning fresh loans, their activity expanded significantly in 2025, rising from $418 million in December 2024 to $794 million in December 2025, representing a 90% increase. BDL noted however that despite this increase, the volume of fresh lending remains small, representing circa 2.5% of the country’s nominal GDP.

-       Asset Quality: BDL commented that from February until October 2025, the banking sector continued to display a weak asset profile with Non-Performing Loans (NPLs) remaining pervasive across all loan sizes. In figures, the NPL ratio reached 86.3% in October 2025, remaining unchanged from February 2025’s reading. The ratio of NPLs rose significantly between December 2019 and October 2025 across several loan tranches. Nevertheless, the NPL ratio dropped from 78.4% in February 2025 to 69.9% in October for loans under LBP 10 billion, from 83.4% to 80.0% for loans under LBP 20 billion, from 86.7% to 85.8% for loans below LBP 30 billion, and from 85.1% to 84.6% for tranches below LBP 40 billion. On the other hand, the NPL ratio increased from 86.8% in February 2025 to 88.0% in October for tranches under LBP 50 billion while also increasing from 86.8% to 87.4% for loans above LBP 50 billion.

-       Deposits: The size of the deposit portfolio fell from $172.1 billion in June 2019 ($123.1 billion in FC deposits and $49.1 billion in LC deposits) to $88.6 billion in December 2024 ($87.9 billion in FC deposits and $0.8 billion in LC deposits) and $87.2 billion in December 2025 ($86.2 billion in FC deposits of which $5 billion in fresh deposits up to November and $1 billion in LC deposits). According to BDL, the $1.5 billion drop witnessed in 2025 owes mainly to the reduction of FC deposits amid continued withdrawals of frozen deposits. BDL commented that the partial repayment of FC deposits has increased in 2025, rising from $4.1 billion in the first half of 2025 to $5.3 billion in the full year 2025, noting that repayments under BDL circular 158 rose by 46% y-o-y, those under BDL circular 166 increased by 199%, and those under both circulars rising by 71.2% over the concerned period. As far as fresh deposits are concerned, the review revealed that the size of fresh deposits has attained $5.0 billion in November 2025 up from $3.5 billion in December 2024, reflecting a rise of circa $1.5 billion. The report noted however that this $1.5 billion increase reflects balances accumulated under circulars 158 and 166 (which rose from $1.9 billion to $3.2 billion). When excluding the circular-related balances, liquid fresh deposits would have risen from $1.6 billion to $1.9 billion (increase of $283 million).