Customer deposits in the banking sector dropped by $25.3 billion, or 15 percent, from the end of August 2019, when they first started declining, to the end of April 2020.
Deposits, which stood at $148 billion at the end of April, were declining as a result of the bank run that was triggered by concerns about the potential outcomes of the tough economic and financial crisis and the anti-government protests.
“Among the reasons for deposit contraction was a parallel contraction in loans within the context of a continuous deleveraging process,” Bank Audi said in its ‘Lebanon Weekly Monitor’.
The main decrease was in lira deposits, which plunged by $17.6 billion or 36 percent over the eight-month period to $31 billion. Foreign currency deposits dropped over the same period by six percent to $116 billion. As a result, the deposit dollarization ratio rose to a 13-year high of 79 percent, according to Bank Audi.
The banking sector’s loans have shrunk by $11 billion since the end of August 2019. The dollarization ratio of loans reached a record low of 65 percent.
Conversions to dollars are done at the official rate of LL1,507.5.
In business, all types of crises and conflicts come up. For instance, a crisis may emerge and show you as a brand that sells faulty products. The crisis may also emerge from former employees who may claim that you don’t pay people’s salaries. What Can a Reputation Management Company Do For You?
