Growing pains

ENAR

Towering above the country’s gross national product at some three times the size, Lebanon’s banks deposits (about $127 billion in 2012) make up much of their balance sheets’ liabilities.  The loan part has been solid and the policy on lending in Lebanese banks is extremely conservative. For example, a minimum of 25 percent down payment on mortgage loans is a norm. This policy has been proven by crisis; Lebanese banks withstood the 2008 financial debacle with hardly any repercussions. In addition, Lebanese banks’ loan to deposit ratio stands at around 35 percent compared, for example, to 80 percent for banks in the Gulf Cooperation Council.  The other major component of banks’ assets is significant holdings of government debt in the form of Lebanese treasury bills and Eurobonds. As of December 2012, 42 percent of the Lebanese banks’ assets were invested in papers issued by the central bank or the state,