Profits of banks’ Syrian affiliates down

Syria Gulf Bank only one to report actual losses

Syrian affiliates of local banks have seen net profits drop to around $7.59 million at end-September 2012, marking a 69.4 percent drop compared to the same period in 2011.

Since 2011, events in Syria have affected the performance of Bank Audi Syria, Bank of Syria and Overseas (affiliate of Blom bank), Byblos Bank Syria, Bank BEMO Saudi Fransi, Fransabank Syria, Sharq Bank (affiliate of Banque Libano-Française), and Syria Gulf Bank (of which the First National Bank owns a minority share), the only subsidiary to report actual losses.

The reasons for this drop included a 15 percent contraction in interest income and a 5.5 percent contraction in fee and commission income, year-on-year. An additional $57.7 million in loan provisions also contributed to increasing operating expenses.

Customer deposits contracted by 5.8 percent compared to end-September 2011, reaching $3.3 billion. The consolidated assets of all seven banks came in at around $4.5 billion, almost four percent lower than at end-September 2011. Bank BEMO Saudi Fransi’s share stood at 26 percent, followed by Bank of Syria and Overseas with 18 percent, Bank Audi Syria with 16 percent, Byblos Bank Syria with around 15 percent, Fransabank Syria with ten percent, Syria Gulf Bank with 9.5 percent, and Sharq Bank with 4.5 percent.

Customer loans saw an 18 percent drop year on year to $1.6 billion. This led to a 130 percent increase in cash and placements with the Syrian Central bank to around $1.3 billion. The loans-to-deposits ratio dropped to 49 percent from 56 percent at end-2011.

The Syrian affiliates of local banks had earlier registered aggregate net losses of $28 million in the first half of this year, compared to net profits of $23 million in the first half of 2011.

Reported by Alexis Baghdadi