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Turmoil Might Hit Fortunes of Banks

Due to the negative impact of the political unrest in Syria, 

Central Bank Governor Riad Salamé expected the aggregate profits of the Lebanese banking sector to remain flat or to drop by 3% in 2012, as reported by Lebanon This Week, Byblos Bank newsletter.

He noted that Lebanese banks and their affiliates in Syria reduced their exposure to the Syrian market in terms of loans and deposits by about 45% over the past 16 months. More specifically, he stated that Syrian deposits at Lebanese banks have declined since the start of unrest in Syria in March 2011.

He indicated that the seven Lebanese banks operating in Syria had an overall direct and indirect exposure to Syria of $4.9bn. He added that they have taken general provisions of about $380m based on stress tests in anticipation of loans that could not be repaid. He noted that this has weighed on the growth in profits of Lebanese banks last year. He forecast the sector's deposits to grow by 8% in 2012 similar to the growth level in 2011, and expected lending growth to exceed 10%.

 

Further, he said that investors' appetite for Lebanese debt instruments is strong, as the auctions and offerings of such instruments are being oversubscribed. In parallel, Governor Salamé refuted allegations that Lebanese banks are being sued for the conduit of illicit money. He stressed that Lebanese banks abide by international rules and standards, have good relations with correspondent banks around the world, and have invested significant resources in recent years in anti-money laundering and combating the financing of terrorism.

Photo: Alan Cleaver

 

Beirut

 24 million jobs set to open up in the green economy by 2030- ILO 

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  • A green initiative launched by Ashrafieh 2020 project aims to transform Ashrafieh into a tranquil and unpolluted area.Green spaces allow residents to walk and ride bicycles.

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