Regional unrest to benefit Lebanese banking sector

17 May 2011

Lebanon’s financial institutions set to gain investment from companies seeking more stable alternatives

Lebanon’s banking sector is the country’s most profitable and sustainable industry. The financial institutions are collectively the largest contributors to gross domestic product, at about 35 per cent.

Over the years, Lebanese banks have amassed enough experience to cope with a range of challenges. From civil wars to global financial crises, the country’s lenders have managed to pull through with conservative lending policies and a vigilant Central Bank.

This ability has made Lebanon’s banking sector one of the most sophisticated in the Middle East and confidence still remains high among international investors.

Although the political situation of the region as a whole has an effect on Lebanon’s economic outlook and business activities, including on the inflow of foreign direct investment, the Arab uprisings should not bring too much bother for the banking community. Adopting effective lending policies will help them through it.

The banks are preparing for slower growth, but financiers in Lebanon are still confident.

To many, these uprisings even present an opportunity. Lebanon’s bankers are bold and they could benefit by attracting capital that is currently being moved out of countries affected by the uprisings.

If the political stalemate in Lebanon also comes to an end, it would create a better environment for the banks to gain further from the 2011 Arab uprisings.

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