ECONOMY Transfers to EDL reach USD 212.1 million in the first two months of 2018, up by a yearly 3.5% Of the transfers to EDL, an amount of USD 3.7 million was allotted to cover debt service and USD 208.4 million to cover reimbursement of the oil suppliers: Kuwait Petroleum Corporation (KPC) and Algeria s Sonatrach. Out of a total oil bill of USD 209 million, EDL contributed 0.3% to the repayment of the two oil suppliers in the first two months of 2018. The Treasury transfers to Electricité du Liban (EDL) reached USD 212.1 million in the first two months of 2018 compared to USD 205 million in the same period of 2017, hence, constituting a 3.5% yearly increase. Of the transfers to EDL, an amount of USD 3.7 million was allotted to cover debt service and USD 208.4 million to cover reimbursement of the oil suppliers: Kuwait Petroleum Corporation (KPC) and Algeria s Sonatrach. The payments to the two oil suppliers increased by a yearly 3.9% from USD 200.54 million in January-February 2017. According to the Ministry of Finance, out of a total oil bill of USD 209 million, EDL contributed 0.3% to the cost of oil and gas purchases in the first two months of 2018. In comparison to the previous year, EDL s contribution was at 2.5% in January-February 2017 with a total bill of USD 205.6 million. Furthermore, transfers to EDL represent a large share out of the expenditures basket serving as an example of how structural problems within the country s public finances remain flagrant. The transfers in the first two months of 2018 amounted to 9.3% of primary expenditures (expenses excluding interest payment and debt service) which totaled USD 2,070 million. This share of transfers out of primary expenditures in the first two months of 2018 is lower than the 13.5% share in the first two months of 2017. Source: Ministry of Finance, Bankmed Research Ministry of Finance, Bankmed Research 1
ECONOMY Consumer Price Index increases by a yearly 7.61% in June 2018 The average inflation rate for the first half of 2018 was recorded at 6%. The prices of water, electricity, gas, and other fuels reported the largest y-o-y increase of 16.54% in June 2018 when compared to June 2017. On a month-on-month basis, inflation recorded a 0.91% increase in June 2018 from May 2018. Inflation recorded a yearly rate of 7.61% in June 2018 from June 2017 as indicated by the Central Administration of Statistics Consumer Price Index (CPI). It is important to note that the average inflation rate for the first half of 2018 was recorded at 6%. In parallel, water, electricity, gas and other fuels registered the largest annual increase in inflation by category by a yearly 16.54% in June 2018 followed by clothing and footwear and transportation prices by a yearly 16.32% and 11.94% when compared to June 2017. Moreover, old rental prices increased by an annual 9.54% followed by housing water, electricity, gas, and other fuels which recorded a 9% yearly increase. Communication prices, on the other hand, witnessed the lowest increase of 1% on a yearly basis in June 2018. On a month-on-month basis, inflation recorded a 0.91% increase in June 2018 from May 2018, with water, electricity, gas and other fuels recording highest monthly rise of 5.96%. Moreover, transportation prices as well as recreational and amusement prices increased by a monthly 1.67% and 0.85%, respectively. On the other hand, health prices recorded the highest month-on-month drop of 0.92% followed by clothing and footwear with a 0.5% drop in June 2018 from May 2018. On a geographical basis, North and South Lebanon witnessed the largest month-on-month increase in CPI by 2.12% and 0.93%, respectively. They were followed by Mount Lebanon and Beirut with a monthly increase of 0.8% and 0.37%, respectively. Moreover, Nabatieh and Bekaa came last recording a respective monthly increase by 0.29% and 0.21%. Source: Central Administration of Statistics, Bankmed Research Bankmed - Market & Economic Research Division 2
The Central Bank s assets reach USD 131.4 billion as at end-july 2018 with USD 11.2 billion in gold reserves BDL s total reserves including gold, reached USD 55.6 billion as at end-july 2018. Banque du Liban (BDL) s bi-monthly balance sheet as at end-july 2018 reported total assets of USD 131.4 billion, recording a yearly 20.2% increase from end-july 2017. As at end-july 2018, gold stood at USD 11.2 billion reporting a 3.4% yearly drop when compared to the same period in 2017, while foreign assets recorded a yearly 5.2% increase to reach USD 44.4 billion. Moreover, loans to the local financial sector increased by a yearly 350% to reach USD 25.3 billion as at end-july 2018. On the liabilities front, BDL reported an increase of 24.3% year-on-year in financial sector deposits to reach USD 109.5 billion, accounting for about 83% of total liabilities along with a 4.1% drop in public sector deposits, which amounted to USD 6.1 billion as at end-july 2018. Source: BDL, Bankmed Research Bankmed - Market & Economic Research Division 3
Bank Audi reports USD 265 million of net profit in the first half of 2018, decreasing by a yearly 14% when compared to the first half of 2017 Bank Audi s net customer loans stood at USD 14.57 billion as at end-june 2018, while customers deposits stood at USD 31.32 billion during the same period. Bank Audi s total Customers Deposits stood at USD 31.32 billion over the first half of 2018, declining by 6.4% from year-end 2017. In its consolidated financial statement for the first quarter of 2018, Bank Audi reports a decrease in net profit by a yearly 14% to reach USD 265 million as at end-june 2018 relative to USD 308.1 million recorded as at end-june 2017. Nonetheless, it is important to note that excluding discontinued operations of USD 95.3 million, Bank Audi reported a 25% yearly increase as at June 2018 in its recurrent profit to reach USD 265.4 million up from USD 212.8 million in the corresponding period of 2017. Bank Audi's total assets stood at USD 44.86 billion as at end-june 2018, rising by 2.5% relative to USD 43.75 billion recorded as at end-december 2017. Total customers deposits stood at USD 31.32 billion over the first half of 2018, declining by 6.4% from year-end 2017. As for net customer loans, it stood at USD 14.57 billion, going down from USD 16.29 billion reported at year-end 2017, thereby decreasing by 10.6%. The shareholders' equity amounted to USD 4.03 billion as at end- June 2018 decreasing by 3.9% when compared to USD 4.19 billion reported at year-end 2017. Source: Bank Audi Group, Bankmed Research Bankmed - Market & Economic Research Division 4
Deposits denominated in foreign currencies expand by USD 115 million during the week of July 12-19, 2018 Local currency term deposits M2 decreased by USD 263 million during the week of July 12-19, 2018 to reach USD 53.199 billion. On the monetary front, the overall money supply M4 decreased by USD 186 million during the week of July 12-19, 2018 to USD 147.456 billion, while the non-banking sector treasury bills portfolio decreased by USD 38 million during the same week. Lebanese Pound denominated deposits and currency in circulation M1 decreased by 2.4% (or USD 177 million) during the aforementioned week to USD 7.208 billion. In parallel, local currency term deposits M2 decreased by USD 263 million during the same week to stand at USD 53.199 billion. The private sector term and saving deposits denominated in LBP (M2-M1) decreased by USD 86 million during the mentioned week to around USD 45.991 billion, while deposits denominated in foreign currencies (M3-M2) expanded by USD 115 million during the week to reach USD 86.864 billion. Source: BDL, Bankmed Research Mazen Soueid, Ziad Hariri, and Nadine Abdel Fattah Disclaimer This material has been prepared by Bankmed, sal based on publicly available information and personal analysis. It is provided for information purposes only. It is not intended to be used as a research tool nor as a basis or reference for any decision. The information contained herein including any opinion, news and analysis, is based on various publicly available sources believed to be reliable but its accuracy cannot be guaranteed and may be subject to change without notice. Bankmed, sal does not guarantee the accuracy, timeliness, continued availability or completeness of such information. All data contained herein are indicative. Neither the information provided nor any opinion expressed therein, constitutes a solicitation, offer, personal recommendation or advice. Bankmed, sal does not assume any liability for direct, indirect, incidental or consequential damages resulting from any use of the information contained herein.