The shrinking factor

For a long time, there was a widespread belief in Lebanon that the Lebanese sector was highly diversified given the large number of banks (at one stage, the sector had more than 80 institutions). The fact remains that this diversification of the banking system was nothing more than an old myth that had turned into an inefficient sector concentration by the mid 1990s. By this time, Lebanon did indeed have a large number of banks, all of which offered the same services and the same products, in varying degrees of quality. At the same time, a limited number of banks, through their better relationship skills and greater vision and understanding of the local and regional environment, succeeded in carving out a top twenty position for themselves, as Lebanon’s largest banks in terms of assets and deposits. These 20 largest banks have slowly attracted the best quality customers in Lebanon, leaving