There is no doubt that the recent violence between Israel and Lebanon has dented the Lebanese economy to the tune of roughly $4 billion and counting. And even though it is likely that funds for repairs will be made available, the cost in terms of morale – the years repairing damaged homes, factories, roads and bridges – will also be considerable. The banking sector had counted on a bumper tourist season. However, it is now expected that the country’s GDP, which experienced solid growth of around 6% by the end of June, will probably experience negative growth, or stagnation at best. Heavy exposure Like other sectors, Lebanese banks have been directly hit by the crisis. Not only have they lost potentially significant business as a result of a spoiled summer season – the sector had wanted to use the summer to add deposits, increase the number of expatriate and foreign
