The banking sector in Lebanon is the key sector in the Lebanese economy as it contributes around 35% of the total GDP of Lebanon, the banking sector of Lebanon is flourishing because of the fact that the culture of Lebanon from the very early time emphasis on the banking system.
Most of the banks in Lebanon are managed by families who are doing this business from quite a long time, although the major banks are owned by some families but their shares are publically traded.
The top banks of Lebanon are:
Bank of Lebanon
Bank Audi SAL-Audi saradar group
BLOM bank s.a.l
Byblos bank S.A.L
Bank med, sal
Fransabank sal
According to a research conducted in the year 2009, the total assets of these six banks alone are calculated to be USD 1, 35,910,108.
These banks contribute the major revenues generated by banks in Lebanon with bank of Lebanon alone contributing USD 53,748,989, bank of Lebanon is contributing around 39.54% of total revenue generated by these six major banks of Lebanon.
There are five types of banks in Lebanon i.e. central banks, commercial banks, Islamic banks, finance companies, and investment banks with major central bank as bank of Lebanon, major commercial bank as bank Audi SAL, Byblos investment bank sal as major investment bank, arab finance house sal as the major Islamic bank and finance bank sal as the major finance bank of Lebanon.
Total assets/GDP and net income of banks in Lebanon
The GDP of Lebanon was 1.5% in the year 2003, which increased by 100% in the year 2004 and recorded to be 3.00%, the GDP in the year 2005 was 4% i.e. an increase of 33.33%, but in the year 2006 the GDP of Lebanon came down drastically to 0.10% down by a whopping -97.50 which was recorded on 205th rank in the world.
but in the year 2007 the most unexpected thing happened i.e. the GDP of Lebanon came down to -6.40% i.e. -6,500% decrement, 6.30% in the year 2008, 6.9% in the year 2009, and 7.20% in the year 2010.
Figure : GDP of Lebanon
It can be clearly seen that the GDP and growth rate of Lebanon is highly fluctuating and the economy of Lebanon is highly unstable.
It is estimated that banking sector of Lebanon is contributing the highest rate of 35% to the GDP of Lebanon that means most of the economy of Lebanon depends on the success of the banking sector.
The total assets of all 74 banks of Lebanon both listed and non-listed are USD 37,648,805 in the year 2002, USD 76,942,752 in the year 2003, 86,223,458 in the year 2004, 94,092,427 in the year 2005, 111,178,534 in the year 2006, 132,193,703 in the year 2007, 155,497,846 in the year 2008, and USD 193,472,583 in the year 2009.
We can see that the bank of Lebanon is consistently performing well in terms of total assets and hence it can be concluded that the centralized banks are doing quite well in the Lebanon banking sector. We can also see that the increase in total income of these banks is increasing at a very high rate.
The net income in the year 2002 was USD 41,599 with some of the banks like al Baraka bank Lebanon sal, national bank of Kuwait, bank al madina sal, and B.L.C bank sal suffering loss.
The net income of these banks in the year 2003 was 376,003 with only unicredit banca di rome Spa bank suffering a lose.
The net income of these banks in the year 2004 was USD 388,903 with only banque de credit national suffering a loss.
The net income generated by these banks in the year 2005 was 492,251 with near east commercial bank and al-mawarid bank sal suffering a loss.
In the year 2006 the net income went up to USD 685,743 with near east commercial bank and al-mawarid bank suffering a loss again.
In the year 2007 the net income of the banks in Lebanon was USD 901,705 with Al Baraka bank Lebanon SAL, al mawarid bank and near east commercial bank SAL consistently suffering a loss.
The net profit earn in the year 2008 to USD 1,196,244 with al Baraka bank Lebanon SAL and al mawarid bank SAL suffering a loss again.
In the year 2009 the net income of the banks in Lebanon was recorded to be 1,460,318 with no loss recorded in the year and finally al mawarid bank SAL also gaining profit.
Thus we can see that in the year 2009 the banks in the Lebanon had done a commendable job.
TYPES OF BANKS
Based on the purpose for which the individual banks are operating in the country, the banks can be categorized under three categories of commercial, investment and the Islamic banks. The number banks functioning under each category are listed below:
COMMERCIAL BANK
There are 64 number of banks specialized under the Commercial banks category which are listed below:
Bank Audi SAL- Audi Saradar Group- Previously known by the name Bank Audi SAL, this bank mainly operates in the Beirut Stock exchange.
BLOM bank SAL- Previously known by the name Banque du Liban et d’ Outre, the bank mainly exchange in the London Stock Exchange.
Byblos Bank, SAL- The bank mainly exchange in the Beirut Stock Exchange.
Bankmed, SAL- Earlier known by Banque de la Mediterranee sal, this commercial is not listed under any exchange.
Fransabank SAL- This commercial bank is too not listed under any stock exchange.
Bank of Beirut SAL- Another bank in the commercial category is active under the Beirut Stock Exchange.
Banque Libano- Francaise- This commercial bank is currently active but is not listed under any exchange.
Credit Libanais SAL- This bank is active but is not listed under any exchange.
Lebanese Canadian Bank SAL- This is another bank established in 1960 operating as commercial bank in the Lebanon.
Besides the above listed banks there are several other banks which include the BBAC SAL, IBL Bank SAL, BLC bank SAL, First National Bank SAL, Audi Saradar Private Bank, Lebanon and Gulf Bank SAL, Banque Nationale de Paris Intercontinentale, Banque BEMO SAL, CreditBank SAL, Emirates Lebanon Bank SAL, Fenicia Bank SAL, Bank Al- Madina SAL, United Credit Bank SAL, North Africa Commercial Bank SAL, the Lebanese Swiss Bank SAL, Societe Nouvelle de la Banque de Syrie et du Liban, Beirut Riyad Bank SAL, Federal Bank of Lebanon SAL, HSBC Bank Middle East, Banque Misr Liban, Saudi Lebanese Bank SAL, Al- Mawarid Bank SAL, MEAB SAL, Ahli International Bank Sal, Banque Beyrouth pour le Commerce SAL, Jammal trust Bank SAL, Banque de l’Industrie et du Travail SAL, Syrian Lebanese Commercial Bank SAL, Transorient Bank SAL, Allied Bank SAL, Inaash Bank SAL, Credit Commercial du Moyen Orient, Wedge bank Middle East SAL, National Bank of Kuwait (Lebanon) SAL, Banque de l’Habitat SAL, Near East Commercial Bank SAL, Banque Pharaon and Chiha SAL, United Bank of Saudia and Lebanon Sal, Saudi National Commercial Bank, etc.
INVESTESTMENT BANK
Following banks are functioning as the investment bank in the city of Lebanon:
Byblos invest Bank
Credit Libanais Investment Bank SAL
Audi Saradar Investment Bank SAL
ISLAMIC BANKS
Following banks are operating as the Islamic bank in the country:
Arab Finance House SAL
Arab Finance House Holding SAL
Al Baraka Bank Lebanon SAL
WORLD RANK BY ASSETS
The top 25 banks of the country along with their world on the basis of their assets are listed below:
Name of the bank
World Rank
Bank Audi SAL - Audi Saradar Group
593
BLOM Bank SAL
711
Byblos Bank SAL
985
Bankmed SAL
1170
Fransabank SAL
1155
Bank of Beirut
1498
Banque Libano-Francaise
1444
Credit Libanais SAL
1732
Lebanese Canadian Bank SAL
1787
Societe Generale de Banque au Liban SGBL
1883
BBAC SAL
2184
IBL Bank SAL
2640
BLC Bank SAL
2646
First National Bank SAL
2925
Audi Saradar Private Bank SAL
3112
Lebanon and Gulf Bank SAL
3453
Banque BEMO SAL
3984
Credit Bank SAL
4027
Emirate Lebanon Bank SAL
4130
Byblos Invest Bank SAL
4178
Fenicia Bank SAL
4338
North Africa Commercial Bank SAL
4701
Credit Libanais Investment Bank SAL
4710
Lebanese Swiss Bank SAL
4946
TOTAL NET INTEREST INCOME
The banks of the Lebanon receives handsome amount of the net interest revenue from the different sources are indicated below:
Name of the bank
Net interest revenue (2009 est.) (in %)
Bank Audi SAL - Audi Saradar Group
1.87
BLOM Bank SAL
2.17
Byblos Bank SAL
2.07
Bankmed SAL
2.04
Fransabank SAL
2.22
Bank of Beirut SAL
1.73
Banque Libano- Francaise
1.82
Credit Libano SAL
2.20
Lebanese Canadian Bank SAL
1.90
Societe Generale de Benque au Liban SGBL
2.53
BBAC SAL
1.73
IBL Bank SAL
1.74
BLC Bank SAL
2.40
First National Bank SAL
1.38
Audi Saradar Private Bank SAL
1.06
Lebanon and Gulf Bank SAL
1.58
Banque BEMO SAL
1.23
Credit Bank SAL
1.89
Emirate Lebanon Bank SAL
2.03
Byblos Invest Bank SAL
1.80
Fenicia Bank SAL
2.12
North Africa Commercial Bank SAL
2.99
Credit Libanais Investment Bank SAL
1.32
Lebanese Swiss Bank SAL
2.28
Societe Nouvelle de la Banque de Syrie et du Liban
1.58
Federal Bank of Lebanon SAL
1.35
Banque Misr Liban
1.89
MEAB SAL
1.57
Evaluation
From the data that we have gathered regarding the banking sector of Lebanon we have seen that the most important bank in the banking sector of Lebanon is the bank of Lebanon which is whose total assets are almost double and at some times more than double of the second finest bank of Lebanon i.e. bank Audi sal.
If we take a clear look at the banking sector of Lebanon then we can see that the net assets of bank of Lebanon was 34.42% in the year 2002, 32.27% in the year 2003, 30.49 in the year 2004, 30.16% in the year 2005, 27.50% in the year 2006, 24.40% in the year 2007, 25.77% in the year 2008, 27.78% of the total assets of all the banks in Lebanon in the year 2009, that clearly notify the importance of bank of Lebanon in the economy of Lebanon.
Moreover it is evaluated that only the top 20 banks had consistently performed well in terms of assets and net income generated and many banks like the al mawarid bank is consistently suffering loss in the banking sector
CONCLUSION
The banking sector in the Lebanon has a great impact on the economy of the country. As indicated in the report it contributes about 35% of the total GDP of the country which is extremely high in comparison to the various other nations of the world. This sector has been considered to be extremely reputed as the part of the tradition of the country and had been the leading forces in the development of the country. The interest of the economy of the country in the banking sector is indicated by its tremendous growth in the last two decades with the assets being multiplied by 7 between the 1993 and the 2006. (Sbeih, 2007) The ranking of the banks in the Lebanon world widely had been considerably reputed as the banks continued to receive the Arabic funds. The number of features which were responsible for it included the banker’s competence, their numerous connections, nice interest rates, keeping up of the banking secrets, etc. There are a number of banks operating for the different purposes like the commercial purposes, investment, etc.
