Banks ready for Basel III

Torbey: our banking sector one of the few able to overcome the global financial crisis and political instability

Most Lebanese banks are already geared up to follow the Basel III capital requirements, said Joseph Torbey, president of the Association of Banks in Lebanon (ABL).

Torbey said that the banking sector saw an aggregate capital growth of 16 percent during 2011. The total assets of banks during the last year stood at around $140 billion, up by nine percent from end 2010.

Torbey, who is also the chairman of the Union of Arab Banks, was speaking during the opening session of a conference on implementing Basel III in Arab banks on March 15. Basel III commitments require banks to hold more tier 1 high-quality capital to reduce risk and absorb additional losses. Central Bank has reiterated that it will enforce raising the banks’ solvency ratio to 12 percent within the next four years, higher than the seven percent stipulated by Basel III criteria.

Torbey said that Lebanon’s banking sector was one of the few in the Middle East which were able to overcome the global financial crisis despite the local political instability during the last few years. This, according to Torbey, is attributable mainly to the conservative approach of the Central Bank, as well as the banking sector’s sufficient deposits portfolio. Commercial banks’ deposits stood at around $116 billion at end-2011, of which $94 billion were resident deposits. Deposits have grown by 7.9 percent compared to 2010.
by Hanadi Chami