BEIRUT: Lebanon s BLOM Bank said on Friday its first-half net profit climbed 5.8 percent to $138.3 million compared with the same period of 2008 and predicted a rise for the full year. Assets stood at $19.42 billion at the end of the half, 8.5 percent higher than that at the end of 2008, while deposits stood at $16.69 billion, up 10.4 percent. We believe that there is going to be an improvement on the results of 2008. We are speaking about strong growth in assets and deposits and also an improvement in terms of profits, Saad Azhari, the bank s chairman and general manager, told Reuters. BLOM Bank registered first-quarter net profit growth of 12.2 percent, after net profit in 2008 rose 23 percent. The Lebanese banking sector was mostly protected from the global financial crisis due to conservative risk management and central bank regulations. Lebanese banks reporting first-half results this week have attributed slower profit growth partly to the lower interest rates applied to their high foreign currency liquidity. The interest on the excess liquidity does not give you a high spread, Azhari said. He said deposits at Lebanese banks had grown by $8 billion in the first half. There was an expectation that due to the financial crisis Lebanese living abroad would make less income and transfer less money but effectively we are seeing the opposite, he said. The money is continuing to flow. The central bank in May forecast deposit growth across the sector of 12 percent for this year. Growth in bank deposits is seen as supportive of the borrowing needs of the Lebanese state, which is one of the most indebted in the world. The central bank has urged Lebanese banks to lend more in Lebanese pounds instead of dollars to reflect a shift in bank deposits from foreign currencies to the local currency. The level of dollarisation has dropped in recent months to around 67 percent from 77 percent. We are seeing more demand for lending in Lebanese pounds. We have stronger growth in lending in Lebanese pounds than dollars, Azhari said. BLOM Bank s net loans to customers stood at $3.6 billion at the end of the half compared to $3.5 billion at the end of 2008. The loans have picked up strongly in the second quarter, Azhari said. He also said BLOM Bank s new investment company in Saudi Arabia had started operations in May and its new corporate bank in Qatar had begun functioning in July. BLOM Bank s shares were 2.63 percent higher at $81.85 by 0829 GMT on Friday. The BLOM market index was down 0.02 percent at 1,471.692 points.
