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The near-term outlook for growth of the Lebanese banking system appears strong, reflecting current buoyant economic conditions, according to research by Deutsche Bank. The research was published by Bank Audi.
“However, growth is likely to moderate somewhat over the next couple of years, as per the Bank, as GDP growth is forecast to slow to the 4-5 percent range,” the report said.
With the global financial crisis hitting banks hard across the globe, Lebanon’s banking sector displayed considerable resilience aided by a strong flow of deposits. In 2009, bank deposits increased by 22% in light of the relatively high interest rates, and the central bank’s foreign currency reserves reached unprecedented levels. Lending activity increased in 2009, and asset quality improved in light of the prudent regulation in the country’s financial sector, and there are expectations that the banking sector will continue its robust performance through 2010.