BEIRUT - Lebanese banks saw a 7.6 percent growth in 2017 compared to 2016, Bank Audi statistics said. “The sector had to face the repercussions of the short-lived political crisis in November, which had yielded some deposit outflows. The return to stability in December helped improve operating conditions and saw money flows flocking back to the country also partly due to some year-end window-dressing operations,” Bank Audi said in its weekly report on Lebanon.

The report was referring to the resignation of Prime Minister Saad Hariri that caused capital outflows.

But the market saw significant improvement when Hariri withdrew his resignation.

All in all, the banking sector activity grew by 7.6 percent in 2017.

The activity growth variations were to a large extent explained by the major driver, i.e. customer deposits, which grew by $6.2 billion in full year 2017.

Deposits actually rose by 3.8 percent on an annual basis, noting that the full year growth was impacted by the November outflows which still did not reverse the positive year to date growth trend,” Bank Audi further explained.

The report admitted that 2016 saw larger inflow of deposits compared to 2017 due to the financial engineering of the Central Bank which attracted large funds.

“It is true that the 2017 deposit growth remains far below the $10. 9 billion increases seen in full year 2016, but this is partly due to the November outflows on the one hand and the one-off deposit inflows to the domestic banking sector in light of the BDL financial engineering operations that took place in 2016 on the other hand,” Bank Audi said.

It added that banking deposits by currency shows that Lebanese pound deposits contracted by the equivalent of $2.8 billion, while those in foreign currencies surged by $9 billion.

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