Lebanese banks might have been rocked to their foundations by a combination of civil war at their borders, internal insecurity, the absence of a strong government and low growth at home. In fact, though, the banks are preaching stability and demonstrating relatively strong economic performances. The 56-bank system is largely profitable, a secure funder of the government and the private sector. It is also an investor in the region and farther afield, with ambitious plans to expand operations.
The Lebanese message is one of stability and stolidity rather than risk. Nassib Ghobril, chief economist, head of the economic research and analysis department, at Byblos Bank, says: "We don’t have growth in the economy, but do we have stability. The key to all of this is the ability to attract deposits, despite everything that has happened since 2004, when the political turmoil started."
Measures to ensure stability include highly conservative banking both by bank managers and by the central bank. These include the requirement on banks to maintain capital ratios that exceed Basel III requirements, tough imposition of due-diligence controls on customers and a requirement to place 15% of foreign exchange reserves with the central bank.