The mechanics that keep the boat afloat

by Thomas Schellen January 19, 2016

written by Thomas Schellen January 19, 2016

AFP PHOTO/JOSEPH BARRAK

Fear, adoration and envy are emotions with great relevance to human and business relations. If we don’t look at a leader in fear or adoration, we often look at her or him in envy – but usually we keep one eye on the leader. Sometimes the only reason why we don’t look to the leader is because we are too busy trying to become the boss and often it is our biggest loss if we don’t learn from, copy or emulate a relevant leader. Banks are arguably the businesses that are best positioned for being viewed as leaders in the Lebanese economic context, given their much-larger-than-GDP shares in financial assets and their lifeline function in financing the private and public sectors. In order to gain leader-level perspectives on quantitative and qualitative factors that mattered most in Lebanese banking in 2015, Executive talked to influencers at four banks that between their

Thomas Schellen

Thomas Schellen is Executive's editor-at-large. He has been reporting on Middle Eastern business and economy for over 20 years. Send mail

2 comments

George Sabat (ACMA) January 25, 2016 - 12:24 PM

With five billion US dollars of interest on the public Debt in 2016 (and growing) how can the banking sector maintain its performance over the next fifteen years? But the real question to ask is: Will Lebanon be in a position to bear such a performance?

Joseph Fakhoury February 2, 2016 - 2:43 PM

Flamboyant and retrospective, however, the author omits three issues that may critically precipitate a banking crisis in Lebanon. I am under no illusion that Lebanese banking has a magic lantern for profitability. The fact of the matter is that the profitability of the sector has been driven by the anomalously high returns on Lebanese sovereign risk. I believe up to 40% of the profitability of the sector is from carrying substantial amounts of Lebanese sovereign risk. Additionally, adverse sociopolitical developments in the Levant will have a depressing impact on the sector. The greater danger, however, is the turmoil in the gulf as a result of the Yemen war and the precipitous drop in the price of oil. This poses tough challenges tor the Lebanese economy and the performance of the banking sector. The critical mass of expat remittances that have sustained , to date, the economy and the performance of the banking sector is due for some precipitous drops that will disrupt this virtuous financial loop between banks and the high return provided on sovereign risk. .

Comments are closed.

The mechanics that keep the boat afloat

You may also like

2 comments