Profits of Lebanese bank subsidiaries operating in Syria plunged more than 69 percent in the first nine months of the year, as the two-year revolt against Bashar Al Assad and international sanctions take their toll on the country’s economy, the Daily Star reported, citing a report by Credit Libanais.
Bank Audi Syria, Bank of Syria & Overseas, Byblos Bank Syria, Bank BEMO Saudi Fransi, Fransabank Syria, Sharq Bank and Syria Gulf Bank have all seen their profitability decline, the Beirut-based newspaper reported.
Net profit at the banks plunged to about US$7.6m in the first three quarters of 2012 due to increasing provisions on loan impairments, the paper cited the bank’s report as saying.
Fransabank Syria accounted for the largest decline in profits among the seven banks.
The violence in Syria, which has evolved into a civil war claiming more than 40,000 lives will lead to the Arab state’s economy shrinking by about 20 percent in 2012 and all its foreign currency reserves being depleted by the end of 2013, according to the Institute for International Finance (IIF).
Inflation in the country has surged 40 percent and the Syrian pound has shed 51 percent of its value against the dollar, the Washington-based IIF said.
The deteriorating situation in Syria is also impacting the economy of neighbouring Lebanon.
“The deepening conflict in Syria continues to pose a threat to Lebanon’s political order and economic stability,” Garbis Iradian, deputy director of the Africa & Middle East department and principal author of the IIF’s report, said at a press conference in Beirut on Monday.
Lebanon’s economy is expected to grow by 0.6 percent in 2012, following the IIF’s estimate of 1.8 percent in 2011 and 7 percent in 2010.