Private sector credit unchanged last year

Outstanding credit provided by the financial sector to the private sector increased by 1.3 percent in 2018 to stand at $69.5 billion at the end of the year, according to the Central Bank’s ‘Quarterly Bulletin’ for the fourth quarter of 2018.

Loans by commercial banks to the private sector witnessed a decline in the first quarter of 2019 as their appetite for lending remains constrained amid tcurrent low growth environment, Bank Audi said in its ‘Lebanon Economic Report’ for the first quarter of 2019. The commercial banks’ claims on resident customers dropped three percent in the first quarter of 2019 to $50 billion, compared with the end of 2018, according to Central Bank data.



Lending to the industrial sector jumped 12 percent, to $7.6 billion, registering the largest growth.

Credit provided to the agricultural sector accounted for just one percent of the total lending portfolio. It inched up 0.5 percent to around $789 million.

“Agricultural and industrial exports were somewhat supported by the opening of the Nassib border crossing between Syria and Jordan, after being closed for three years due to turmoil in Syria. The closure of the Nassib border crossing in 2015 cut off a vital access point to Jordan and Gulf markets,” according to Bank Audi’s ‘Lebanon Economic Report’ for the last quarter of 2018.

Lending to the financial intermediation sector recorded the steepest fall, plunging 14 percent year-on-year to $3.1 billion.

Trade and services continued to secure the lion’s share of the total. The credit granted to this sector accounted for 34 percent of the overall portfolio. It increased five percent to $23.7 billion.



Credit granted to individuals dropped 1.4 percent to $21.1 billion.

Housing loans, which represent 61 percent of the lending provided to individuals, decreased as well, falling 1.1 percent to $12.9 billion.

Lending to the construction sector decreased three percent to $11.2 billion.

“The real estate market witnessed a slump in 2018 with all of its indicators declining.

Decelerating demand due to the subsidized housing loans issue coupled with domestic politico-economic uncertainties came to put extra pressure on the sector,” Bank Audi said in the report.

Property sales plummeted last year, both in terms of the number of transactions and total value, dropping 17 percent and 18 percent respectively.