Banks in Syria see drop in assets

Syrian affiliates of Lebanese banks see assets down by 17 percent, maintain 3.5 percent growth in profits

The combined assets of Lebanese banks operating in Syria totaled $5.8 billion at the end of 2011, according to the initial financial results issued by the seven banks with affiliates in Damascus.

The total assets of the Lebanese banks operating in Syria had decreased by 17.2 percent from end-2010. There was an average drop of around 30 percent in the assets of the three largest private commercial banks. Banque BEMO Saudi Fransi’s assets dropped by 34 percent, while the assets of Bank of Syria and Overseas (affiliate of BLOM Bank) were down by 24.6 percent, and those of Bank Audi Syria dropped by 32.4 percent. The assets of Byblos Bank Syria decreased by around nine percent.

Meanwhile, assets of Syria Gulf Bank (affiliate of First National Bank), Fransabank Syria, and Bank Al-Sharq (affiliate of Banque Libano-Française) rose by 41 percent, 31 percent, and 73 percent respectively. The increase in the assets of these banks was attributed to an increase in their capitals.

Banks in Syria are facing mounting pressure from two directions. They have to endure the slowed growth due to the evolving political uproar in the country. At the same time, banks in Syria are struggling to shrug off the vast impact of an array of sanctions imposed by the EU and the United States. The sanctions force a freeze on Syrian assets in these countries, and prohibit companies and individuals in these countries from doing business with Syrian firms or individuals. The most recent of these sanctions was imposed on January 23, when the EU blacklisted five banks in Syria.

The aggregate shareholders equity of the seven affiliate banks reached $635 million at end-2011, up by 28.3 percent from end-2010.

The aggregate net profits of the seven banks reached $36.8 million in 2011, up by only 3.5 percent from 2010.