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Finance, Banking and Development

Finance, Banking and Development. Presented by Mr. Saad Azhari Vice Chairman & General Manager BLOM Bank July 21, 2004. Finance, Banking and Development. I- Economic Activity 1. Domestic Transactions 2. International Trade and Position 3. Real Sector II- Financial Markets

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Finance, Banking and Development

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  1. Finance, Banking and Development Presented by Mr. Saad Azhari Vice Chairman & General Manager BLOM Bank July 21, 2004

  2. Finance, Banking and Development I- Economic Activity 1. Domestic Transactions 2. International Trade and Position 3. Real Sector II- Financial Markets 1. Banking Sector 2. Fixed Income Market 3. Beirut Stock Exchange III- Fiscal Situation 1. Public Finance 2. Public Debt BLOM Bank S.A.L.

  3. I-1 Domestic Transactions • Banks’ clearing activity increased by 6.4% in the first-five months of 2004 to reach $12.7bn, compared to a 4.3% growth in 2003 (reaching $29.6bn). • The value of returned checks dropped 11.1% year-on-year to reach $800m in 2003. • The rate of cleared checks in US dollars, the most relevant estimate of economic dollarisation, stood at 70.3% at end-2003 and first-five months of 2004. BLOM Bank S.A.L.

  4. I-2 International Trade & Position • International Trade: • Exports accumulated to $842m in the first-five months of 2004, increasing by 43.4% from that of 2003, while imports up to May 2004 rose by 29.4% to $3,499m. • Year-on-year, exports rose by 50% in 2003 to reach $1,524m, while imports ended up 20% at $7,168m in 2003. • Balance of Payment: • For the first-five months of 2004, the country’s BoP accumulated to a surplus of $197.1m compared to a surplus of $2.3bn in the same period last year due to Paris II inflows. • At end-2003, the BoP reached a staggering surplus of $3.39bn, up 117% year-on-year. BLOM Bank S.A.L.

  5. I-3 Real Sector • Construction Sector: • For the first-four months of 2004, construction permits grew by 27.7% year-on-year to 2.71 million m2, after registering an 11.5% annual growth in 2003 with a total permits’ area of 8.81 million m2 • Transport Sector: • The total number of passengers at Beirut International Airport rose by 29% in the first-half of this year to reach 1.44 million, following a registered 9% growth for the whole of 2003. • The number of tourists visiting Lebanon surged by 45% in the first-half of 2004 to reach almost half a million, compared to nearly 1 million tourists at end-2003, the highest since 1974. BLOM Bank S.A.L.

  6. II-1 Banking Sector • Commercial banks' consolidated balance sheet amounted to $62bn at the end of May 2004, up 11.5% year-on-year. In turn, total deposits rose by a 13.1% year-on-year, reaching $50.5bn up to May 2004, coupled by a 4.8% rise in capital funds to $3.8bn in the same period. • For the whole of 2003, banks’ assets grew by 14.1%, while banking deposits and capital funds posted a yearly increase of 13.7% and 9.4% respectively. BLOM Bank S.A.L.

  7. II-1 Banking Sector (Cont’d) BLOM Bank S.A.L.

  8. II-2 Fixed Income Market • The face value of the portfolio of outstanding LP treasury bills reached LP27,576bn at the end of May 2004, up 15% from May 2003. At the end of 2003, the TBs portfolio stood at LP26,013bn, posting a 9.7% yearly growth rate. • The outstanding value of local currency Certificates of Deposits (CDs) issued by the Central Bank reached LP10,378bn at the end of May 2004, almost doubling from LP5,270bn a year earlier. • The outstanding value of FC sovereign Eurobonds stood at $13.5bn at end-May 2004, slightly up from $13.1bn in May 2003 and $12.8bn in 2003. BLOM Bank S.A.L.

  9. II-3 Beirut Stock Exchange • Total turnover on the Beirut Stock Exchange dropped year-on-year by 7.4% in the first-half of 2004 to reach $76.17m. In 2003, total traded value increased by 10.17% to $131m. • Trading activity up to June 2004 was divided between economic sectors as follows: Development and reconstruction (63.3%), banking (24.4%), trading (0.7%), industrial sector (7.4%) and Junior market (4.2%). • The BLOM Stock Index (Lebanon’s broad market index) rose by 26.7% year-on-year in the first-half of 2004 to 604.81, following an almost stable yearly performance in 2003. BLOM Bank S.A.L.

  10. II-3 Beirut Stock Exchange (Cont’d) Historical Background *Jan 22, 1996 = 1,000 Source: Beirut Stock Exchange Bulletins BLOM Bank S.A.L.

  11. III-1 Public Finance • The country’s budget deficit posted a 39% yearly drop in the first-half of 2004: The year-on-year drop in the deficit-to-spending ratio resulted from an 11% growth in revenues coupled with a 22% drop in expenditures, with the budget registering a primary surplus of $485m in the first-six months of 2004. • The deficit ratio amounted to 37.2% of expenditures in 2003, down from 42.5% in 2002. This resulted from a significant 14.2% rise in revenues coupled with an increase of 4.5% in expenditures, while the budget registered a primary surplus of $622m in 2003, almost tripling year-on-year. BLOM Bank S.A.L.

  12. III-2 Public Debt • Lebanon’s gross public debt reached $35.2bn in May 2004, up 7.8% year-on-year. In turn, net domestic debt (after deducting public sector deposits) increased by 18.03% to $16.7bn in May 2004, while external debt edged upwards by 3.1% to $16.3bn in the same period. This compares to a gross public debt of $33.3bn at end-2003. BLOM Bank S.A.L.

  13. Key Indicators *Figures are up to April 2004 BLOM Bank S.A.L.

  14. Key Indicators (Cont’d) *Figures are up to May 2004 BLOM Bank S.A.L.

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