According to the consolidated balance sheet of Lebanese commercial banks, total assets contracted by 8.06% year-on-year (YoY), dropping to $104.56 billion in August 2024. This decline followed Banque du Liban’s (BDL) adoption of a new official exchange rate of LBP 89,500 per USD, effective January 31, 2024.
Currency and deposits with BDL accounted for a significant 78.14% of total assets, decreasing by 3.42% YoY to $81.71 billion as of August 2024. Deposits with BDL, which make up 99.9% of total reserves, fell by 2.7% YoY to $81.62 billion. Additionally, vault cash in Lebanese pounds plummeted by 88.06% YoY to $85.13 million, reflecting the impact of the new exchange rate.
Claims on resident customers, representing 5.26% of total assets, dropped sharply by 28.63% to $5.5 billion. Meanwhile, the resident securities portfolio, constituting 4.92% of total assets, fell by 35.18% to $5.15 billion. Specifically, holdings of Eurobonds declined by 16.04% since August 2023, standing at $2.23 billion (net of provisions) by the end of August 2024. Claims on the non-resident financial sector also contracted by 2.42% YoY to $4.29 billion.
Resident customer deposits remained the primary component of liabilities, accounting for 65.46% of the total. These deposits decreased by 6.46% YoY to $68.45 billion in August 2024. Breaking it down, foreign currency deposits – comprising 99.1% of resident customer deposits – declined by 3.32% YoY to $67.83 billion. Deposits in Lebanese pounds, which account for just 0.9% of resident deposits, fell sharply by 79.55% YoY to $616.25 million, primarily due to the implementation of the new exchange rate.
These shifts highlight Lebanon’s increased dollarization and reliance on cash, with the dollarization ratio of private sector deposits rising from 96.44% in August 2023 to 99.25% in August 2024.
Non-resident customer deposits, constituting 20.23% of total liabilities, declined slightly by 0.91% YoY to $21.16 billion in August 2024. Within this category, deposits in Lebanese pounds dropped by 83.64% to $31.43 million, while foreign currency deposits edged down by 0.16% to $21.13 billion.
Additionally, liabilities to the non-resident financial sector, which accounted for 2.52% of total liabilities, fell by 15.19% YoY to $2.64 billion in August 2024.
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