Lebanese banks bear
the brunt of political uncertainty

Gulf News

Domestic and regional political upheavals and slow economic growth are expected to curtail Lebanon’s banking sector asset growth and profitability, according to analysts.

The key source of risk for Lebanese banks remains their huge exposure to the sovereign. “Domestic banks continue to use large and resilient, albeit slowing, deposit inflows to buy the debt the domestic government issues to finance its structurally high deficits, in turn inflating the banks’ balance sheets and effectively exposing them to a single large borrower,” Paul-Henri M. Pruvost, an analyst with credit rating agency Standard & Poor’s, said.

Source: Gulf News FULL STORY