Investments coming into Lebanon from abroad totaled just $1.1 billion in 2012, down almost 70 percent on 2011 and the second sharpest decline amongst emerging markets, according to a report by the Institute of International Finance. In the Middle East and Africa (MEA), Lebanon was the smallest recipient of foreign direct investment (FDI) and Saudi Arabia the largest, with $17.3 billion flowing into the kingdom. As for FDI outflows, a total of $650 million left the country for investment abroad, down 13 percent on 2011, and representing the third lowest in the MEA. As a percentage of the size of the economy, FDI accounts for just under 3 percent, a drop since 2008 when FDI accounted for 14 percent of gross domestic product — the MEA and emerging market average was 2 percent, according to the study.
Lebanese banks – the Cyprus exposure
There are 12 Lebanese banks operating in crisis-ridden Cyprus, constituting one third of the island’s 37 foreign banks according to Makram Sader, the secretary general of the Association of Banks in Lebanon. As of the end of 2012 the Lebanese banks’ deposits accounted for less than 3 percent of the total deposits of the country’s banking sector, which stood at $128 billion and for slightly less than 2.2 percent of the total $88 billion of deposits in the Cypriot banking sector as of January 2013. Some 74 percent of the total deposits in Cyprus are held by the top two banks, Bank of Cyprus and the Popular Bank of Cyprus (Laiki Bank), which is being wound down as part of a 10-billion-euro ($13 billion) bailout agreement between Cyprus and an international group of lenders.
Banking on pretty tiles
Lebanon’s Credit Bank has dashed ahead of current demand and competition by implementing the region’s first e-banking solution on Windows 8, Microsoft’s multi-device operating platform. Credit Bank’s Windows 8 app gives users access to online services across the contemporary gamut of connected computing devices, from PC to tablet and smartphone. The range of Windows 8 is still limited, especially in the important mobile segment, but the bank went ahead with commissioning the app because it wanted its online services to be compatible with all platforms in the market, said Hanadi Saad, Credit Bank’s assistant general manager of retail banking. “The main vision was to provide our customers with what they will look for, in anticipation of consumer demand. Sooner or later they’re going to ask for it so we wanted to be the first.” According to Saad, the adoption rate of e-banking by the bank’s clients is around 20 percent, with expectation of significant growth. While glowing in colorful tiles, the app offers a meager set of standard options. That the advertised functionalities are skewed toward offerings such as “Checkbook Request” or “Change Session Time-Out” is no fault of the bank, as no platform innovation can change that Lebanon is an awful laggard in online banking regulations. “We definitely need the central bank to follow us with legislation and further e-banking functionalities,” Saad said. E-banking plays a major role in Credit Bank’s ongoing redesign of its identity and branches.