Net profits of the Alpha banks (14 largest banks) increased by almost five percent to $910 million in the first half of 2014 from the same period, last year. Assets increased by a similar percentage to $184 billion.

The increase was mainly driven by a four percent surge in local activities and a 6.5 percent growth in subsidiaries abroad, according to a report of the Bankdata Financial Services.

Customers’ deposits increased by five percent to $6.8 billion to $151 billion during the first semester of this year. The growth was driven by a 12 percent increase in the deposits of subsidiaries abroad. Deposits grew locally by three percent.

Loans to the private sector grew by seven percent to $57 billion. They surged by 14 percent in subsidiaries abroad against nearly four percent, locally.

“The local market is still bringing growth to banks. High growth from subsidiaries abroad, mainly in terms of assets, deposits, and loans, is expected after wide expansion plans in international markets,” said Marwan Mikhael, Head of Research at Blominvest Bank. “Some economies in regional turmoil markets, like Egypt, are back to recovery, which is another factor of growth from markets abroad,” he said.

Loans in lira grew (seven percent) faster than those in US dollars (2.8 percent).

“The Central Bank (BDL) incentive packages are a main driver of the growth of lending in lira,” said Mikhael. “The BDL is continuing its policy in this regard and more businesses will be benefiting from subsidized loans this year,” he said.

The growth of loans did not affect the quality of assets. Non-Performing-Loans to overall loans decreased from 6.75 at the end of December 2013 to 6.37 percent at the end of June.

Operational expenses surged by more than ten percent.

“Some banks invested large amounts of money, while expanding their presence abroad. This may have affected the overall net profits of other banks inside the Alpha group,” said Mikhael.    

Alpha banks added 35 new branches to their network during the first half of the year. It increased the total number of their branches to 1,166, including 67 percent in Lebanon and 33 percent abroad.