According to Lebanon’s consolidated commercial banks’ balance sheet, total assets declined annually by 10.4% to stand at $104.32B by June 2024 amid BDL’s adoption of a new exchange rate of LBP 89,500 per USD, effective 31/01/2024.
On the assets side, currency and deposits with the Central Bank represented a high figure of 78.38% of total assets; they dropped annually by 5.21% to settle at $81.76B in June 2024.
Deposits with the central bank (BDL) represented 99.88% of total reserves, and decreased by 4.2% YOY, to reach $81.66B in June 2024.
Furthermore, vault cash in the Lebanese pound declined by 90.03% every year to stand at $100.71M by the same period. The drop is attributed to the calculation based on the new official exchange rate of LBP 89,500 per USD.
Claims on resident customers, constituting 5.49% of total assets, shrank considerably by 29.11% to $5.73B in June 2024. Moreover, resident securities portfolio, representing 4.49% of total assets, dropped by 41.26% in June 2024 to stand at $4.68B.
More specifically, the Eurobond holding recorded a decline of 18.96% since June 2023, to reach $2.26B (net of provisions) by the end of June 2024. Additionally, claims in the non-resident financial sector grew by 0.8% YOY to stand at $4.41B by June 2024.
On the liabilities side, resident customers’ deposits were the main account, representing 66.11% of total liabilities; they declined by 7.83% since June 2023 to reach $68.97B by June 2024.
In more detail, deposits in foreign currencies (being 99.07% of resident customers’ deposits) declined by 3.27% YOY to reach $68.33B by June 2024. Additionally, deposits in LBP (0.93% of resident customers’ deposits) fell by 84.73% YOY to stand at $639M by June 2024, especially after applying the new official exchange rate of 89,500.
This reveals that Lebanon has become highly dollarized and cash-based, as the dollarization ratio for private sector deposits increased from 95.37% in June 2023 to 99.23% in June 2024.
