Lebanon has maintained financial stability for the last quarter century during repeated shocks and challenges. A stable exchange rate pegged to the dollar, remittances and deposit inflows from nonresidents and Lebanese abroad, and adroit crisis management have helped preserve confidence through regional and domestic economic and political shocks.
In 2017, the value of the Lebanese banking sector’s assets reached USD 227 billion, with 14 banks in Lebanon accounting for 87% of the total amount. Moody’s Investor Services also upgraded its outlook on the domestic banking system from negative to stable, reflecting an improvement in the country’s economic growth and better political stability.
For anyone considering a bank in Lebanon, this list of banks in Lebanon is a helpful guide on where to start.
The insurance sector faces structural challenges to its sound development. Total assets are small compared to the banking sector (US$4.3 billion at end-2014, or 8.6 percent of GDP). There appears to be scope for market expansion and deepening, which would help corporates and households better manage risk exposures, support investment, contribute to financial inclusion, and expand contractual savings that could contribute to capital market development. Recent market growth has been driven by medical insurance, life (protection) and motor insurance (in tandem with growth in mortgage and car-loan markets). There is a large number of unspecialized companies, including many small, family owned and managed companies, resulting in intense price competition. Many of these firms have made limited investments in risk management and pricing techniques, and the ICC considers some do not have adequate professional capacity, resulting in operational risks and mispricing.
Capital markets make a marginal contribution to financing the Lebanese economy. Lebanon has only 10 listed companies (with a market capitalization of about 24 percent of GDP, versus 40 percent for a peer group of middle-income countries), while total assets under the management of mutual funds amount to US$1.7 billion (3.3 percent of GDP). The size of private bond markets is also insignificant.
•debt and equity products, including share issues as part of capital increases, fixed and
variable rate bond issues and placements
• financing major infrastructure projects
• syndicated loan structures
• arrangement of Islamic structures
• investment banking, securitization, etc.
Lebanon enjoys a fertile investment climate with foreign investment welcoming polices. The government offers incentives to attract both foreign and domestic investment, including low income tax rates for individuals and corporations. This has contributed to placing the country on the center of the economic map of the Middle East as a host of several foreign multinationals.