Deposits in banks
to top $150 billion
Deposits are growing significantly, and lending is at a slower pace
Resident and non-resident deposits in commercial banks increased by more than $3.5 billion in the first half of 2015, to reach more than $148 billion, compared to an increase of around $3 billion for the same period last year, according to Bank Audi estimates.
“Deposits are growing at a better pace than the same period last year,” said Marwan Barakat, Head of Research at Bank Audi. With an annual increase of an average of seven percent, deposits are expected to reach around $152 billion at the end of this year, according to Bank Audi estimates.
“This positive growth in deposits is sufficient to finance the domestic economy in its private and public components, as well as the trade deficit, and to maintain banks’ high liquidity,” said Barakat.
Although deposits are growing significantly, bank lending is slow. Loans to the private sector in the first five months reached $500 million, compared to $1.2 billion in the same period last year, according to Barakat. “This weakness is due to the lack of lending opportunities locally and regionally, because of sluggish economic growth, which is putting pressure on banks’ profitability,” he said.
Reported by Leila Rahbani
Date Posted: Jul 21, 2015