It is a truism of Middle East finance that the region’s banks can handle political volatility. But of all Arab markets, perhaps the one with the most irrepressible banks is Lebanon – seen as the Switzerland of the Middle East, before its devastating civil war of the 1970s and 1980s.
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Lebanon has shown resilience in very stressful situations, through wars, street fights, assassinations and political turbulence Riad Salamé, central bank governor |
While terrorism, refugees and war stretch from its borders with Syria and Israel often to the heart of government in Beirut, Lebanon’s banks are in aggregate more than four times bigger than its economy. “Lebanon has shown resilience in very stressful situations, through wars, street fights, assassinations and political turbulence,” says Riad Salamé, the world’s longest-serving central bank governor.
Now Lebanese banks are beginning to make more use of their outsized balance sheets and experience of handling geopolitical turmoil in the next stage of their international expansion – often in countries with similar problems, and where banks used to more staid environments are afraid to venture.
Lebanon itself looks unpromising. The sovereign sold its largest-ever bond in late February, a $2.2
