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Financial Results of the Three Largest Listed Lebanese Banks for the First Half of 2017

03 August 2017
Sustainable Performance and Growth

  Net Profits ($ Million) Return on Average Equity (ROAE%) Return on Average Assets (ROAA %) Cost to Income (%)
BLOM BANK 233.53 16.66 1.54 34.36
Audi Bank 212.83* 13.00 0.99 54.47
Byblos Bank 66.27 7.06 0.62 56.60
* Doe not include the exceptional profits of $95.22 million made from the sale of Bank Audi’s credit cards operations.

 

The un-audited financial results of the three largest listed Lebanese banks (BLOM, Audi, and Byblos) for the first half of 2017 show that they have maintained their sustainable performance and growth, despite the continuing difficult operating conditions arising from the economic slowdown in Lebanon and political instability in neighboring countries. Aggregate operational, non-exceptional net profit increased to $512.63 million in the first half of 2017, growing by 2.18% from the same period in 2016.

On an individual basis, BLOM BANK attained the highest level of operational, non-exceptional net profit of $233.53 million at end June 2017, growing by 3.03% on the same period in 2016. Bank Audi came second with net profit of $212.83 million, up by 5.36%. Byblos Bank’s net profit ranked third, falling by 9.07% to $66.27 million.

The profit performance of the three banks can also be seen from looking at profitability ratios, namely the rate of return on average common equity (ROAcE) and on average assets (ROAA), which measure the productivity to generate earnings from equity and assets. BLOM BANK recorded the highest ROAcE at 16.66% and the highest ROAA at 1.54%. The two other banks followed, with Bank Audi’s ROAcE at 13.00% and ROAA at 0.99%, and Byblos Bank’s ROAcE at 7.06% and ROAA at 0.62%. BLOM Bank’s effective performance can be attributed to its highly managerial and operational efficiency. This is demonstrated by BLOM BANK's cost-to-income ratio of 34.36%, the lowest of all three, followed by 54.47% for Bank Audi and 56.60% for Byblos Bank.

Growth was not limited to profits only, since it was also registered in key balance sheet items. BLOM reported $31.32 billion in assets, growing by 6.13% from end of December 2016, and its loan portfolio grew by 7.41% to $7.69 billion, while its shareholder’s equity fell by 6.59% to $2.73 billion due to its recalling of preferred shares 2011. BLOM BANK's balance sheet aggregates naturally benefited from its acquisition of the three HSBC Lebanon branches on 17/6/2017. Assets at Byblos reached $21.79 billion, growing at 4.71%, and its loan portfolio increased by 2.01% to $5.28 billion, while its shareholder’s equity fell to $1.76 billion at a rate of 2.08%. As for Audi, its assets fell by 0.89% to $43.87 billion, with its loan portfolio increasing by 2.53% to $17.66 billion, while its shareholder’s equity rose by 3.34% to $3.82 billion.

As important, the three banks’ performance also involved strong banking fundamentals. In this respect, for instance, Byblos’s Basel III capital adequacy ratio exceeded 18%, Audi’s coverage of non-performing loans by special and collective provisions and real guarantees stood at 175.4%, and BLOM’s non-performing loans ratio was only at 0.5%.

Once again, these results show the top three listed Lebanese banks’ ability to maintain good growth and financial strength by pursuing conservative and cautious policies, given the exceptional circumstances still facing them. As a result, they reconfirm the Lebanese banking sector’s position as the leading financial pillar in the country and the backbone of the economy.

Disclaimer  |  List of Banks No. 14. Copyright © 2017 BLOM BANK