Non-toxic assets

The AFP news agency reports:

Lebanon's banking sector is weathering the global financial crisis and profits are expected to increase by 10 percent this year, the Central Bank governor said, in a reflection of the country's ability to rebound from a legacy of adversity.

Riad Salameh attributed the growth in the banking sector, which comes at a time when a liquidity crisis has gutted some of the world's top banking giants, to strict regulations imposed by the Central Bank, including a cash reserve requirement of 15 percent.

The strength of the country's banks is largely a reflection of the country's resilience as it has repeatedly looked to rebuild after years of conflict and instability turned broad swaths of Beirut into a gutted battleground with different areas controlled by competing militias and armies.

"There are no toxic assets in our banking sector and that has created a comfort to the markets and to depositors," he said.

Salameh said private banks' assets currently top $100 billion, or nearly four times the country's gross domestic product. Foreign currency and other assets held by the Central Bank have risen steadily to nearly $20 billion.

Most of the country's banks have reported an increase in deposits and profits in the first nine months the year, he said.
Bank Audi, Lebanon's largest in assets and deposits, announced last month that its net profits for the first nine months of 2008 increased by 28.7 percent, to $180.6 million, compared to the same period a year ago.

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Picture: Hussein Malla/Associated Press. An employee at the Central Bank of Lebanon stacks bricks of Lira... there is lots of cash going through the system, but how much of it stops in the country?