Millions of Lebanese expatriates in Europe, North America, Africa and the Gulf will be hoping that the good fortunes enjoyed last year by the country's banking sector will continue.
Unlike the Lebanese who stayed, the Lebanese living abroad have been both able, and willing, to invest substantial sums in their home economy, providing the funds needed for vital reconstruction projects, the development of tourism, housing and real estate, as well as the re-capitalisation of their banks.
While government coffers have benefitted through the raising of Eurobonds on international markets in which Lebanese players as well as foreign institutional funds have participated heavily, the banks have also seen their treasuries soar in the past two years through a welter of offerings in the form of Euro Certificates of Deposit (CDs), Global Depository Receipts (GDRs) and subordinated notes as well as bonds. Beneficiaries include Byblos Bank, Banque Audi, the Banque du Liban et d'Outre Mer, Banque Libano-Francaise, Banque de la Mediterranee, Bank of Beirut and Credit Libanaise.
The result has been impressive: the consolidated balance sheet of the country's commercial banks rose by just over 26 per cent in the year ending last September to reach 43,850 billion Lebanese pounds (LL), equivalent to about $28.8 billion, according to figures published by the Banque du Liban, the central bank. Total deposits rose even more, by 27.8 per cent to LL 36,084 billion ($23.7 billion).
On the Beirut Stock Exchange (BSE), bank shares continued to dominate, reflecting the renewed confidence in the sector shown by both local and international investors. All three of the banks listed closed at the end of last year at record highs. Shares in Banque Audi, which is owned by Lebanese and Kuwaiti shareholders as well as Bankers Trust of the US, reached $31.12, while those of the Banque Libanaise pour le Commerce (BLC) closed at $21.62.
The Bank of Beirut, the most recent entrant, saw its stock rise to $6.62 a share, partly because of estimates that its profit for the first nine months of 1997 had virtually doubled to $6.9 million. When 20 per cent of its shares were first offered to the public in 1997, the issue was 11 times oversubscribed, reflecting huge investor interest. A substantial part of that, bankers in Beirut say, came from abroad, where Lebanese expatriates are estimated to be worth some $40 billion in all. Bank shares, because they offer transparency and...