Earlier this week, 305 people were killed in a single day in Syria, making it the bloodiest day so far in the year-old civil war. Bombings are rife, whole towns are being bombarded by tanks and planes, innocents are dying. But life has to carry on and life includes banking.
A fascinating report recently published by Bemo Saudi Fransi Finance (BSFF), the Syrian investment bank, highlights the performance of the Syrian banking sector during the past quarter. What is amazing is the resilience shown in the face of such appalling operating conditions. Overall, total bank assets only declined by 2% during the second quarter. Total net loans dropped by 9% from the first quarter, while customer deposits were flat at SYP405 billion ($5.8 billion). The loan-to-deposit ratio of the sector has fallen from 57% to 52%, showing that there is still strong liquidity in the system.
Non-performing loans have grown rapidly from 10.9% to 14% and overall revenue has fallen. Net interest income is down 8.6% while net fee and commission income is down 14.7%. Treasury gains and FX losses round out the general picture. And yet within all this the banks are doing well. The report’s authors say that excluding FX losses the banking sector made a profit of SYP138 billion during the second quarter against losses of SYP11 billion during the first three months of the year.
The report also explains the practical difficulties banks face operating within such a vicious war zone. “On paper, Syrian private banks seem to be coping in spite of the prevailing situation. On the ground, however, management is facing a number of different concerns that have come to light in 2012, such as staff and branch security, logistical and cash transportation difficulties, disruption to normal business hours in some cities, sanctions concerns, as well as international banking limitations among other things.”
Such concerns put things in perspective, when the worst that bankers in Asia need to worry about are new regulations and bonus caps.
- Arab Bank
- Bank Audi
- Byblos Bank
- Banque Bemo Saudi Fransi
- Bank of Syria and Overseas
- Cham Bank
- International Bank for Trade and Finance
- Syria International Islamic Bank
- Al Baraka Bank
- Bank of Jordan
- Qatar National Bank
- Syria Gulf Bank
- Bank Al Sharq