Exclusive, “Akhbar al-Yawm” agency

The figures issued by the Bank of Lebanon indicate that the total loans benefited by the private sector from commercial banks and financial institutions in Lebanon amounted to 190,000 billion Lebanese pounds at the end of June 2023, compared to 39,446.6 billion Lebanese pounds at the end of 2022 and 46,436.5 billion Lebanese pounds at the end of June 2022. In US dollars, the total loans benefited by the private sector from commercial banks and financial institutions in Lebanon amounted to USD 12.9 billion at the end of June 2023, compared to USD 26.2 billion at the end of 2022 and USD 30.8 billion at the end of June 2022. The decrease in the figures in US dollars in lending to the private sector is mainly due to the change in the official exchange rate of the Lebanese pound against the dollar to 15,000 Lebanese pounds per dollar (LBP 1,507.5 previously) at the beginning of February 2023, while the increase in lending in Lebanese pounds during the first half of the year comes due to the impact of the new official exchange rate. These detailed figures came in the weekly economic report of the Byblos Bank Group Lebanon This Week.

The decrease in the portfolio of loans used for the private sector is mostly due to the decision of customers to settle their loans prematurely, to borrowers repaying their loans denominated in foreign currency at lower values than the original loan by checks on local accounts or in Lebanese pounds based on the previous official exchange rate, to the limited demand for new loans amid political and economic uncertainty, to the lack of liquidity and the unwillingness of lenders to take risks amid difficult conditions in the country.

The figures in US dollars were calculated according to the official exchange rate of the Lebanese pound against the US dollar, which was 1,507.5 Lebanese pounds per dollar until the end of December 2023 and based on the new official exchange rate of 15,000 Lebanese pounds per dollar from the end of February 2023.

The distribution of beneficiaries of financial sector loans by economic sectors indicates that the loans benefited from the trade and services sector amounted to 69,922 billion Lebanese pounds, or 36.2% of the total loans at the end of June 2023, followed by the contracting and construction sector with 48,572.2 billion Lebanese pounds (25.2%), personal loans with 27,767. 8 billion Lebanese pounds (14.4%), and the industrial sector with 25,340 billion Lebanese pounds (13%), the financial mediation sector with 12,294. 3 billion Lebanese pounds (6.4%), the agriculture sector with 3,381. 7 billion Lebanese pounds (1.8%), while other sectors accounted for the remaining 5,721.7 billion Lebanese pounds (3%). In addition, housing loans that are part of the loans used for personal loans amounted to LBP 9,827.7 billion at the end of June 2023.

The distribution of loans by type indicates that the total loans for real estate insurance amounted to 67,366.2 billion Lebanese pounds, which constituted 35% of the financial sector loans to the private sector at the end of June 2023. It was followed by loans with personal guarantees of 27,013.6 billion Lebanese pounds (14%), then loans against financial values of 6,996.2 billion Lebanese pounds (3.6%), loans against cash guarantees or bank guarantees of 5,768 billion Lebanese pounds (3%), loans against other real guarantees of 2,530.8 billion Lebanese pounds (1.3%), while overdrawn loans amounted to 83,325 billion Lebanese pounds, or 43.2% of the total.

Also, the distribution of loans used in the trade and services sector indicates that wholesale trade accounted for 34.7% of the total loans of the trade and services sector at the end of June 2023, followed by retail trade with 22.5%, real estate services, leasing and employment with 16%, the transport and storage sector with 13.7%, the hotel and restaurant sector with 9.6%, and cultural services with 3.7%.

Personal loans accounted for 76.7% of the number of beneficiaries of total loans at the end of June 2023, followed by loans to the trade and services sector (15.2% of beneficiaries), the industrial sector (4.65% of beneficiaries), the contracting and Construction Sector (2% of beneficiaries), the agriculture sector (1.4% of beneficiaries), and the financial brokerage sector (1% of beneficiaries), while other sectors accounted for the remaining 5.9% of beneficiaries of loans.

The total number of beneficiaries reached 195,594 at the end of June 2023, which represents a decrease of 43,285 beneficiaries, or by 18% from the end of the year 2022 and a decrease of 69,035 beneficiaries (-26%) from the end of June 2022; also, 56.4% of beneficiaries received loans less than five million Lebanese pounds at the end of June 2023, followed by beneficiaries of loans ranging from 100 million Lebanese pounds to 500 million Lebanese pounds (17%), beneficiaries of loans in the range of 25 million Lebanese pounds to 100 million Lebanese pounds (12%), beneficiaries of loans ranging from five million Lebanese pounds to 25 million Lebanese pounds (9.2%), beneficiaries of loans ranging from one billion Lebanese pounds to Five billion Lebanese pounds (2.3%), beneficiaries of loans between 500 million Lebanese pounds and one billion Lebanese pounds (1.7%), beneficiaries of loans exceeding 10 billion Lebanese pounds (0.9%), and beneficiaries of loans in the range of five billion Lebanese pounds to 10 billion Lebanese pounds (0.5%).

Beirut and its suburbs accounted for 82.6% of the total financial sector loans and 56.6% of the number of beneficiaries at the end of June 2023. It was followed by the Mount Lebanon region with 9% of total loans and 15.5% of the number of beneficiaries, then southern Lebanon with 3% of total loans and 8.7% of the number of beneficiaries, northern Lebanon with 2.8% of total loans and 12.2% of the number of beneficiaries, and the Bekaa region with 2.5% of total loans and 7% of the number of beneficiaries.

In parallel, the total off-budget liabilities of banks and financial institutions amounted to LBP 584.0.86 billion (USD 38.9 billion) at the end of June 2023, compared to LBP 78,669.4 billion (USD 52.2 billion) at the end of 2022. These commitments include guarantees worth LBP 555,843 billion, equivalent to 95.2% of the total, followed by pledges to sign LBP 14,235.2 billion (2.4%), pledges on bonds worth LBP 9,313. 6 billion (1.6%), term operations for LBP 3,935. 7 billion (0.7%), and financing pledges for LBP 696 billion (0.1%), while other pledges amounted to LBP 62.8 billion (0.01%).