Walid Raphaël, BLF Chairman and General Manager, discussed Banking and Insurance and their role in the economic development, during the Lebanese National Energy (LNE) event, at Biel.
Raphaël explained how banks not only have the role of intermediary by transforming savings into investments, but also have the role of allocating resources to the best projects, those that can return the capital to its depositors. And in order to do that, they should earn depositors’ trust. This brings us to a very crucial value: Trust. Raphaël believes that trust is the most precious asset. It allows banks to attract funding and to finance the economic development. It’s the trust that Lebanese have in the Lebanese banking sector that has built a case of resilience. Raphaël also discussed the balance sheet of the banking sector pointing out its role in financing Lebanon’s economy and helping it grow further. He explained that the sector is oversized compared to the country’s economy but that it shows its ability to finance a substantial growth. The banks’ resources are mostly composed of the customers’ deposits, which accounts for nearly 83% of the total balance sheet, and continue to grow significantly. As for the other part of funding, it is generated from equity. He concluded that the funding of Lebanese banks is more stable, since it only depends on deposits and shareholders’ money to fund the economy, rather than on capital market. As for funding, Banks have financed the private sector as well as the Lebanese government at high levels. They were able to provide them with a variety of loans, catering thus to the needs of the country. Finally, Raphael advanced three areas which will hopefully generate growth in the future: the oil and gas sector (that will launch a process of investments), the knowledge economy (the entrepreneurial sector which is creating jobs and keeping the human capital in Lebanon) and the Public Private Partnerships (which he believes is a real opportunity for the country).To conclude with, Raphaël closed up by referring to the sector’s biggest constraint, “equity”, and how generating enough profit to increase the equity base will benefit Lebanon and the Lebanese.
You can watch Walid Raphaël’s full speech here