Analysis of banking sector results

The profitability of alpha banks – those with deposits above $2 billion – has grown in the third quarter of 2016 when measured by the improved return on average equity (ROAE). The ROAE ratio at end of September was almost two percentage points higher than a year earlier. This insight from quarterly figures released after the end of the third quarter (for details see the table below) is a hopeful sign for the Lebanese economy which, after a challenging year in 2015, showed signs of an even drearier year in 2016. In the midst of a troubled socio-political context, Lebanese banks stood their ground throughout the first three quarters. In fact, while activity registered modest growth in the first six months, mostly generated in the second quarter, the third quarter witnessed acceleration in domestic activity. The financial engineering operations initiated by Banque du Liban, Lebanon’s central bank, generated significant growth