CREDIT LIBANAIS S.A.L.

CREDIT LIBANAIS S.A.L. Issue No. 577 25 th December 1 st 2017 Economic Research Unit Credit Libanais Headquarters Adlieh Beirut, Lebanon Tel +961.1.608000 Fax +96.1.608231 research@cl.com.lb

TABLE OF CONTENTS LEBANON NEWS ECONOMIC INSIGHTS > LEBANON RANKS 5 TH IN THE ARAB WORLD IN THE 2015 INDEX OF ECONOMIC FREEDOM 1 > THE ILO RELEASES ITS WORLD SOCIAL PROTECTION REPORT 2017-19 2 > LEBANON RANKS 15 TH REGIONALLY IN TERMS OF NATIONAL BRAND STRENGTH FOR THE YEAR 2017 3 > 28% OF BEIRUT CITIZENS ARE HAPPY IN THEIR CITY OF RESIDENCE 4 > OCCUPANCY RATE IN LEBANON S HOSPITALITY SECTOR AT 68.3% IN OCTOBER 2017 5 > LEBANON RANKS EIGHTH IN THE MENA REGION IN EXTERNAL DEBT RETURNS IN OCTOBER 2017 6 > INDUSTRIAL EXPORTS DROP BY 3.39% Y-O-Y TO $1.65 BILLION YTD AUGUST 2017 7 > BANKS SHARE OF LBP-DENOMINATED DEBT AT 34.5% IN SEPTEMBER 2017 8 > RESERVES AT BDL REACH $53.84 BILLION IN NOVEMBER 2017 9 > BSE TRADED VALUE DOWN BY 25% Y-O-Y BY NOVEMBER 2017 10 > THE BISRI DAM TO PROVIDE 1.6 MILLION PEOPLE WITH CLEAN WATER 11 CORPORATE NEWS > ALPHA GROUP OF BANKS POSTS NET PROFITS OF $1.98 BILLION YTD SEPTEMBER 2017 12 MONETARY PERFORMANCE > MONETARY AGGREGATES 13 > MONEY MARKETS 13 LEBANESE EQUITIES > LEBANESE EQUITIES & CREDIT LIBANAIS INDICES 14 LEBANON'S ECONOMIC & FINANCIAL SECTOR INDICATORS 16 LEBANON'S RATINGS 17 LEBANON RANKS 5 TH IN THE ARAB WORLD IN THE 2015 INDEX OF ECONOMIC FREEDOM Lebanon ranked 5 th in the Arab world in Fraser Institute s Index of Economic Freedom with an index score of 7.6 in 2015, compared to 7.7 a year before. THE ILO RELEASES ITS WORLD SOCIAL PROTECTION REPORT 2017-19 The number of people living below the poverty line in Lebanon has expanded by 66% since 2011, whereby 170,000 Lebanese became poor between years 2011 and 2014, and currently, around 350,000 Lebanese survive with less than $1 per day, according to the ILO. LEBANON RANKS 15 TH REGIONALLY IN TERMS OF NATIONAL BRAND STRENGTH FOR THE YEAR 2017 Lebanon came in 15 th in the region and 94 th in the world in Brand Finance s National Brand Value for the year 2017, which widened by 15% (c. $2 billion) to reach $21 billion. INDUSTRIAL EXPORTS DROP BY 3.39% Y-O-Y TO $1.65 BILLION YTD AUGUST 2017 Lebanon s industrial exports fell by 3.39% y-o-y to nearly $1.65 billion by the end of the first eight months of the current year, down from around $1.71 billion during that same period last year. ALPHA GROUP OF BANKS POSTS NET PROFITS OF $1.98 BILLION YTD SEPTEMBER 2017 The aggregate net after-tax profits of the Alpha group of banks rallied by 21.36% year-on-year to $1,983.09 million by September 2017, up from $1,634.07 million in the same period last year. ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-608000 FAX: 01-608231

SYNOPSIS OF TERMS "BDL" "ABL" "MOF" "BOP" "IMF" "Moody's" "BSE" "GDRs" "M1" "M2" "M3" "M4" "CPI" "PPI" "CLASI" "CLFI" "CLCI" EIU EOY "P/E" "P/BV" "YTD" "YTD Price Performance" "LBP" "USD" "Y-O-Y" "GDP" "MENA" Banque Du Liban Association of Banks in Lebanon The Lebanese Ministry of Finance Balance of Payment The International Monetary Fund Moody's Investors Service Beirut Stock Exchange Global Depositary Receipts Currency in Circulation + Demand Deposits in LBP M1 + Other Deposits in LBP M2 + Deposits in Foreign Currencies M3+ Treasury Bills Held by Non-Banking System Including Accrued Interests Consumer Price Index Producer Price Index Credit Libanais Aggregate Stock Index Credit Libanais Financial Sector Stock Index Credit Libanais Construction Sector Stock Index Economist Intelligence Unit Year Price to Earnings Multiple Price to Book Multiple Year to Date Yield to Date Price Appreciation The Lebanese Pound The United States Dollar Year-on-Year Gross Domestic Product Middle East and North Africa ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-608000 FAX: 01-608231

LEBANON RANKS 5 TH IN THE ARAB WORLD IN THE 2015 INDEX OF ECONOMIC FREEDOM Fraser Institute published its Economic Freedom of the Arab World: 2017 Annual Report in which it recalculated its index of economic freedom scores for the previous years, and up until 2015, amid the availability of revised data. In fact, the index of economic freedom pivots around five major pillars, namely: - Size of government (expenditures, taxes, and enterprises): Measures the extent to which countries depend on individual choice and markets rather than the political process to allocate resources and services; - Commercial, economic law and security of property rights: Assesses the security of contracts and rightfully acquired property; - Access to sound money: Measures whether the government resorts to printing money to finance expenditures; - Freedom to trade internationally: Assesses the presence of constraints (such as tariffs for instance) that affect international exchange; and - Regulation of credit, labor, and business: Checks for the presence of regulations that restrain entry into markets and interfere with the freedom to voluntary exchange labor and products. The value of the index is accordingly calculated by averaging the related scores on a scale of zero to ten. In this context, Lebanon s overall economic freedom score fell from 7.7 in 2014 to 7.6 in 2015. In detail, the report showed that Lebanon saw only minor changes in its sub-indices, scoring 6.0 in the commercial, economic law and security of property rights sub-index and 6.5 in the freedom to trade internationally metric in both 2014 and 2015. Lebanon fared better in the size of government metric, registering a score of 8.6 in the year 2015 (up from 8.4 in 2014), yet fared worse in the access to sound money criterion with a score of 9.3 in 2015 (down from 9.6 in 2014) and in the regulation of credit, labor, and business criterion with a score of 7.9 (down from 8.2 in 2014). Lebanon's Performance in the 2015 Index of Economic Freedom Components 2014 Score 2015 Score Size of Government 8.4 8.6 Commercial, Economic Law and Security of Property Rights 6.0 6.0 Access to Sound Money 9.6 9.3 Freedom to Trade Internationally 6.5 6.5 Regulation of Credit, Labor, and Business 8.2 7.9 Summary Economic Freedom 7.7 7.6 Source: Fraser Institute, Credit Libanais Economic Research Unit When compared to its regional peers, Lebanon tied with Qatar and ranked 5 th in economic freedom in the Arab world, ahead of the Palestinian Territories (score: 7.5), Oman (score: 7.4), and Somalia (score: 7.1), only to name a few. On the other hand, Lebanon trailed behind Kuwait (score: 7.7), Jordan (score: 7.9), and the UAE and Bahrain (score: 8.0, each). Overall Economic Freedom Index for Arab Countries in 2015 Libya Algeria Iraq Sudan Comoros Mauritania Djibouti Morocco Egypt Tunisia Yemen Saudi Arabia Somalia Oman Palestinian Territories Qatar Lebanon Kuwait Jordan United Arab Emirates Bahrain 4.8 5.2 5.9 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 7.0 7.1 7.4 7.5 7.6 7.6 7.7 7.9 8.0 8.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Source: Fraser Institute, Credit Libanais Economic Research Unit SOURCE: FRASER INSTITUTE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 1

THE ILO RELEASES ITS WORLD SOCIAL PROTECTION REPORT 2017-19 The International Labor Organization (ILO) released this week its World Social Protection Report 2017-19: Universal Social Protection to Achieve the Sustainable Development Goals, which aims at providing an overall assessment of the current state of social protection systems and their constituents worldwide, the progress made on the level of expanding the social protection net, and the remaining gaps that are yet to be minimized. The report highlights as well the importance of building social security systems, which is emphasized in the 2030 Agenda for Sustainable Development and which plays a major role in achieving many of its goals such as: universal health coverage, gender equality, and decent work and economic growth. Moreover, always according to the report, proper social protection systems contribute to reducing and preventing poverty and boosting domestic demand and productivity. The report presents extensive, profound country-specific statistics on multiple dimensions of social security based on information extracted from the ILO World Social Protection Database and the ILO Social Security inquiry, which is a survey submitted to covered countries to provide estimations of a set of relevant indicators, and serves as such as a main reference for policymakers and other interested parties. With respect to global results, the report revealed that, despite a significant improvement in the extension of social protection around the world over the past year, only 45% of the world population is effectively covered by at least one social protection benefit, while the remaining 55% is left unprotected. Furthermore, ILO estimates also showed that 29% of the world population is covered by comprehensive social security systems while the remaining 71% is partially or entirely not protected. Overall, Europe, Central Asia, and the Americas were the best-performing regions, offering the most comprehensive and mature social protection systems, while Africa, Asia, and the Arab States were identified as under-investors in social protection. As far as Lebanon is concerned, the ILO report stated that the country, hosting more than a million refugees on its territories and having the highest per capita concentration of refugees in the world, has seen its social protection systems drastically deteriorate over the past couple of years. In detail, the number of people living below the poverty line in Lebanon has expanded by 66% since 2011, whereby 170,000 Lebanese became poor between years 2011 and 2014, and currently, around 350,000 Lebanese survive with less than $1 per day. With respect to social protection schemes for private workers in the country, the report mentioned that benefits associated with old age, invalidity/disability, employment injury, and sickness are borne by other insurance arrangements, while benefits related to medical care, maternity, and family are covered by social insurance, social assistance is offered by the safety net program, and unemployed and survivor benefits are non-existent. It also noted that spending on public social protection accounts for 2.1% of Lebanon s GDP compared to 11.2% for Egypt, 10.4% for Tunisia and 8.5% for Algeria only to name a few. The report noted as well that Lebanon is the only country in the Arab region that has no pension scheme for private sector workers. In addition, Lebanon, along with countries like Kuwait, Qatar, and the United Arab Emirates (UAE), still rely on employer liability provisions as basis for employment injury protection with 47.8% of its labor force covered by said provisions. Finally, Lebanon emerged as the only country in the region to have employment-related child and family benefits under social security programs and social protection effective coverage. The benefit is paid as a lump sum: LBP 60,000 is paid to the wife and LBP 33,000 is paid for each child - up to five children. Further details are portrayed in the table below: Country Public Social Protection Expenditure (% of GDP) (1) Arab Countries in the World Social Protection Report 2017-19 Number of Social Security Policy Areas Covered by at Least One Programme Aspect Percentage of Older Persons Covered by Social Protection Systems Number of Paid Week Leaves Maternity Percentage of Wages Paid during Covered Period Algeria 8.5% 8 63.6% 14 100% Bahrain 4.0% 5 40.1% 8.6 100% Djibouti 7.3% 6 12.0% 14.0 100% Egypt 11.2% 7 37.5% 17.2 100% Iraq - 7 56.0% 14.0 100% Jordan 8.9% 6 42.2% 10.0 100% Kuwait 11.4% 5 27.3% 10.0 100% Lebanon 2.1% 5 0.0% 10.0 100% Libya 6.6% 7 43.3% 14.0 100% Morocco 6.6% 8 39.8% 14.0 100% Oman 3.8% 4 24.7% 7.0 100% Palestinian Territory - - 8.0% 10.0 100% Qatar 1.7% 4 18.0% 7.0 100% Saudi Arabia 3.6% 5-10.0 50%or 100%(2) Sudan 2.3% 4 4.6% 8.0 100% Syria 1.9% 4 16.7% 17.2 100% Tunisia 10.4% 8 33.8% 4.3 67% United Arab Emirates 5.0% - - 6.4 50%or 100%(2) Yemen 9.6% 4 8.5% 10.0 100% (1) Latest available year (2) Depending on years of continuous service in the company Source: International Labour Organization, Credit Libanais Economic Research Unit SOURCE: ILO, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 2

LEBANON RANKS 15 TH REGIONALLY IN TERMS OF NATIONAL BRAND STRENGTH FOR THE YEAR 2017 Brand Finance, a London-based independent brand valuation consultancy, recently published its year 2017 edition of the Nation Brands Report, in which it assesses the world s most valuable nations. In details, National Brand Value is calculated as the product of the Brand Strength Index (computed, as an overall percentage, using the scores registered by each nation on three main levels: investment, society, and goods & services), by the Brand Royalty Rate (a hypothetical rate determined, also in the form of a percentage, by average rates included in agreements among national companies as a means for valuing said companies), by Brand Revenue (taken as the net present value of the the five-year GDP forecast of a nation which is used as a proxy for revenues from sales of all brands in that nation). The report mentioned that even though the United States of America (USA) maintained its global leading position as the most valuable nation brand ($21.1 trillion), it registered a frail y-o-y growth of 2% in national brand value which will place its current dominance at risk in the future. The report also highlighted the rise of Chinese brands given that 50 Chinese companies are part of the Global 500 most valued brands, and that said number stood at only 8 in 2008. In the same perspective, the report added that the dynamics between the USA and China were clearly echoed by the trends of Western stagnation and Asian improvement. In details, well-recognized European nation brands, such as Germany, Netherlands, Belgium, Switzerland, Sweden, Austria, either witnessed a drop or a minor increase in value, while Asian nation brands displayed a robust growth. The top 3 positions worldwide remained unchanged year-on-year with the USA topping the list again with a National Brand Value of $21,055 billion (2% annual improvement) and a Brand Strength Rating (BSR) of AAA- for the year 2017, followed, at a large distance, by China with a National Brand Value of $10,209 billion (44% annual improvement) and a BSR of AA and Germany with a National Brand Value of $4,021 billion (4% annual decline) and a BSR of AAA-. Japan came in 4 th, registering a 15% improvement in brand value, with a National Brand Value of $3,439 billion and a BSR of AAA-. The United Kingdom recorded a 6% annual increase in its National Brand Value to $3,129 billion (BSR of AAA) and occupied the 5 th position worldwide. Regionally, the United Arab Emirates leapfrogged Saudi Arabia and came in first (21 st position internationally) with a National Brand Value of $594 billion (BSR of AAA) and recorded an impressive 24% appreciation in its valuation. Saudi Arabia came in second on the regional list and lost its leading position despite registering a remarkable 19% improvement in its National Brand Value to $575 billion (BSR of AA), followed by Qatar (BSR of AAA, regional rank: 3, international rank: 42), which recorded some 6% drop in in its National Brand Value to $223 billion, and Kuwait (BSR of AA-, regional rank: 4, international rank: 51, National Brand Value: $170 billion). Egypt was the only non-gcc country to make it to the top five regional list (57 th international rank), yet its National Brand Value shrunk by 10% to $88 billion (BSR of A+). Locally, Lebanon came in 15 th in the regional ranking, outperforming only Libya, and occupied the 94 th place in the world (down from 92 nd in the previous year) amongst all 100 countries covered by the report. In details, Lebanon s National Brand Value widened by 15% (c. $2 billion) to reach $21 billion in the year 2017, up from $19 billion in the year 2016. As far as Lebanon s Brand Strength Rating is concerned, it stood at A+ in the year 2017, improving from A in the previous year. Country National Brand Value 2017 ($ Billion) National Brand Value 2016 ($ Billion) Nation Brands 2017 % Change Rank (2017) Rank (2016) Regional Rank (2017) Brand Strength Rating (2017) Brand Strength Rating (2016) U.S.A. 21,055 20,574 2% 1 1 - AAA- AAA China 10,209 7,087 44% 2 2 - AA AA Germany 4,021 3,882 4% 3 3 - AAA- AAA- Japan 3,439 3,002 15% 4 4 - AAA- AAA United Kingdom 3,129 2,942 6% 5 5 - AAA AAA U.A.E. 594 478 24% 21 25 1 AAA AAA Saudi Arabia 575 482 19% 22 23 2 AA AA Qatar 223 238-6% 42 36 3 AAA AAA- Kuwait 170 140 22% 51 51 4 AA- AA- Egypt 88 98-10% 57 55 5 A+ A+ Algeria 70 64 10% 60 60 6 A A Iraq 60 51 17% 66 65 7 CC CCC Oman 50 41 22% 70 74 8 AA AA Sudan 49 45 9% 71 72 9 CC CCC Morocco 49 40 20% 72 75 10 AA- AA- Yemen 29 29 3% 85 83 11 BBB BB Bahrain 28 29-2% 86 80 12 AA+ AA+ Jordan 25 24 4% 89 87 13 AA- AA- Tunisia 22 20 8% 92 89 14 A+ A+ Lebanon 21 19 15% 94 92 15 A+ A Libya 17 14 19% 97 100 16 DDD DDD Source: Brand Finance, Credit Libanais Economic Research Unit SOURCE: BRAND FINANCE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 3

28% OF BEIRUT CITIZENS ARE HAPPY IN THEIR CITY OF RESIDENCE Bayt.com, one of the leading job sites in the Middle East region, recently published its Top Cities in the Middle East and North Africa Survey 2017 report in which it evaluates the quality of life in key cities across the region after gathering the opinions of residents in said cities surrounding seven main factors that shape their lifestyles. These factors are as follows: economic factors, labor rights, environmental factors, standard of living factors, socio-cultural factors, sports, arts, culture & recreation factors, and entrepreneurship factors. In this context, the citizens of Muscat, Oman emerged as the most happy among their regional peers, with 84% of respondents unveiling that they were very or somewhat happy with their city of residence, followed by the citizens of Dubai (78%) and Abu Dhabi (77%) in the United Arab Emirates (UAE). On the other hand, Beirut residents appeared to be the least happy among all other interviewed citizens according to Bayt.com s survey, with a mere 28% of respondents having positive feeling towards life in their city of residence, whereas 21% appeared to be not at all happy, 28% somewhat unhappy, and 23% neither happy nor unhappy. In fact, the survey shows that the majority of Beirut citizens are rather unsatisfied with all covered economic factors and labor rights. Beirut residents are also displeased with most environmental factors at the exception of the weather (where the city happened to be the best performer in this vein, with 54% of respondents considering weather as good or excellent ). Concurrently, on the standard of living front, the Lebanese capital scored poorly in terms of basic services such as water, electricity, and sewage systems, public transportation, and the feeling of safety and stability, yet fared better in terms of the availability and quality of healthcare facilities (54% and 43% of respondents respectively), the availability of entertainment avenues such as restaurants, cinemas, social activities, and others (78% of respondents), the availability of educational institutions (where Beirut topped the list - 79% of respondents), and the quality of education (where Beirut again led the list of all covered cities - 81% of respondents). Furthermore, Beirut reported mixed results in terms of socio-cultural factors, yet performed exceptionally well in the sports, arts, culture & recreation category, ranking among the top MENA cities in that area, with all underlying sub-elements being considered as good or excellent by 40% to 54% of respondents. Finally, Beirut citizens turned out to be unhappy with most entrepreneurship factors. Beirut Residents' Opinions with Regards to Selected Factors of Life in their City Factors Sub-Elements Excellent Good Average Poor Bad Don't Know Availability of Jobs 1% 5% 21% 40% 32% 1% Economic Factors Labor Rights Environmental Factors Standard of Living Factors Socio-Cultural Factors Sports, Arts, Culture, and Recreation Factors Entrepreneurship Factors Competitive Salaries 1% 7% 27% 41% 22% 3% Benefits for Working Parents 1% 9% 37% 26% 18% 10% Availability of Affordable Housing 0% 4% 31% 28% 36% 1% Reasonably Priced Day-to-Day Amenities 3% 8% 36% 30% 22% 1% Career Growth 1% 8% 24% 43% 23% 1% Service Benefits 1% 7% 28% 28% 28% 9% Termination Rights 0% 11% 31% 31% 17% 10% Vacation Allowances 1% 16% 47% 18% 12% 6% Parenthood Allowances 1% 12% 30% 26% 17% 15% Wage Protection System 0% 9% 22% 32% 25% 12% Health Insurance and Social Security Systems 1% 17% 36% 24% 19% 4% Pro-active Policymaking 0% 3% 31% 33% 19% 13% Clean Streets/Roads 0% 10% 17% 33% 40% 1% Comfortable Weather 16% 38% 23% 12% 12% 0% Clean Air 1% 5% 23% 30% 41% 0% Clean Water 1% 15% 24% 28% 32% 0% Beauty of Architecture and Buildings 5% 28% 35% 18% 14% 0% Manageable Traffic 0% 2% 19% 19% 60% 0% Availability of Parks/Community Gardens 1% 6% 23% 33% 36% 1% Availability of Healthcare Facilities 20% 34% 28% 9% 9% 0% Quality of Available of Healthcare Facilities 11% 32% 36% 10% 10% 0% Water/Electricity/Sewage Systems 0% 5% 19% 33% 43% 0% Accessible Public Transportation System 1% 7% 18% 26% 45% 3% Quality of Available Public Transportation System 1% 5% 13% 27% 51% 3% Availability of Wide Range of Entertainment Avenues 36% 42% 10% 6% 6% 0% Availability of Educational Institutions 34% 45% 13% 2% 4% 1% Quality of Education 32% 49% 13% 3% 2% 1% C hild Friendliness 3% 39% 41% 11% 6% 0% Feeling of Safety and Security 1% 13% 31% 24% 29% 2% Equal Treatment of Both Genders 1% 26% 43% 18% 11% 1% Fair Treatment to All Nationalities 1% 17% 31% 24% 27% 1% Stable Political Environment 0% 5% 26% 30% 36% 3% Low Crime Rates 1% 13% 41% 17% 25% 3% Effective Law Enforcement 1% 7% 34% 31% 24% 3% Freedom of Expression 7% 29% 29% 17% 18% 1% Tolerance to Different Cultures and Ideas 3% 30% 33% 19% 14% 2% Availability of World Heritage Sites/Preserved Old Towns 10% 30% 38% 16% 5% 1% Availability of Natural Areas/Natural Landscapes 14% 26% 31% 19% 10% 0% Availability of Outdoor/Sports Activities 11% 32% 27% 21% 7% 1% Availability of Family-friendly Activities 9% 34% 27% 20% 5% 4% Culture and Arts Offerings 12% 42% 24% 14% 5% 2% Availability of Relaxation Options 11% 34% 33% 13% 8% 1% Ease of Starting Up a New Business 2% 10% 27% 28% 28% 6% Lack of Bureaucracy in Procedures and Paperwork 0% 3% 26% 38% 24% 8% Ease of Finding Finances to Start a Business 2% 8% 30% 34% 24% 2% Market Willingness to Accept New Ideas and Innovations 5% 25% 38% 17% 13% 3% Market Saturation 3% 16% 39% 23% 14% 5% Ability to Find Local Talent to Employ 10% 26% 29% 20% 12% 3% Affordability of Taxes and Fees if Any 1% 7% 31% 31% 24% 6% Source: Bayt.com, Credit Libanais Economic Research Unit SOURCE: BAYT.COM, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 4

OCCUPANCY RATE IN LEBANON S HOSPITALITY SECTOR AT 68.3% IN OCTOBER 2017 Ernst & Young (EY) published its Middle East Hotel Benchmark Survey Report on the performance of 4 and 5 star hotels in the Middle East region, conveying a 13.5 percentage-point annual increase in the average occupancy rate in Beirut s hospitality sector to 68.3% during the month of October 2017. Concurrently, the average room rate rose by 8.2% y-o-y to $149, with the average room yield soaring by 34.8% to $101. Performance of Beirut's Hospitality Sector During the Month of Oct-2016 Oct-2017 Change Hotel Occupancy Rate (%) 54.8 68.3 13.5 pctg points Average Room Rate (USD) 137 149 8.2% Rooms Yield (USD) 75 101 34.8% Source: Ernst & Young, Credit Libanais Economic Research Unit The following chart captures the monthly evolution in the occupancy rate in Beirut s 4 & 5 star hotels over the October 2016 - October 2017 period: 80% Monthly Evolution of Hotel Occupancy in Beirut 70% 60% 50% 54% 65% 64% 57% 67% 62% 69% 70% 75% 69% 74% 68% 45% 40% 30% Source: Ernst & Young, Credit Libanais Economic Research Unit On a regional basis, Beirut recorded the 4 th highest (65.8%) average occupancy rate among covered Middle Eastern capitals during the ten-month period ended October 2017, noting that the Lebanese capital saw the highest percentage-points y-o-y increase (+7.3 p.p.) in hotel occupancy rate among its peers. Abu Dhabi outperformed the region, recording an average occupancy rate of 75.7%, followed by Muscat (67.8%), only to name a few. In a related note, Kuwait City s 4 and 5 star hotels charged the highest average room rate ($225), right ahead of their likes in Manama ($199), Doha ($177), Riyadh ($166), Muscat ($159), Beirut ($154), Amman ($145), Abu Dhabi ($113), and Cairo ($85). Middle East Hotel Benchmark Survey During the Period Ended Hotel Occupancy Rates (%) Average Room Rates (USD) Room Yields (USD) Country - Capital Oct-2016 Oct-2017 Change in % Pts Oct-2016 Oct-2017 % Change Oct-2016 Oct-2017 % Change Bahrain - Manama 51.8 50.4-1.3 208 199-4.5% 108 100-7.0% Egypt - Cairo City 63.0 67.3 4.3 47 85 82.5% 29 57 95.0% Jordan - Amman 50.8 49.4-1.3 158 145-8.3% 80 72-10.7% Kuwait - Kuwait City 41.9 48.0 6.1 238 225-5.2% 100 108 8.5% Lebanon - Beirut 58.5 65.8 7.3 142 154 8.3% 83 101 21.9% Oman - Muscat 63.8 67.8 4.0 185 159-14.1% 118 108-8.7% Qatar - Doha 61.2 59.3-1.9 194 177-8.7% 119 105-11.5% Saudi Arabia - Riyadh 56.8 54.5-2.3 193 166-13.6% 110 91-17.1% United Arab Emirates - Abu Dhabi 74.1 75.7 1.6 121 113-6.9% 90 86-4.9% Source: Ernst & Young - Middle East Hotel Benchmark Survey, Credit Libanais Economic Research Unit Hotel Occupancy Rate in the Middle East Region YTD October 2017 Average Room Rate in the Middle East YTD October 2017 (USD) Kuwait City 48.0% Amman 49.4% Manama 50.4% Riyadh 54.5% Doha 59.3% Beirut 65.8% Cairo 67.3% Muscat 67.8% Abu Dhabi 75.7% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Source: Ernst & Young, Credit Libanais Economic Research Unit Cairo 85 Abu Dhabi 113 Amman 145 Beirut 154 Muscat 159 Riyadh 166 Doha 177 Manama 199 Kuwait City 225 0 50 100 150 200 250 Source: Ernst & Young, Credit Libanais Economic Research Unit SOURCE: ERNST & YOUNG, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 5

LEBANON RANKS EIGHTH IN THE MENA REGION IN EXTERNAL DEBT RETURNS IN OCTOBER 2017 According to the High Yield & Emerging Market Profiles report published by Merrill Lynch, the yield on Lebanon s external debt stood at a negative -0.80% in October 2017 (down from 0.22% in September). This poises Lebanon to occupy the 8 th place among 9 MENA countries included in the external debt EM sovereign bond index in terms of total yield, with Tunisia topping the list and enjoying a total monthly return of 2.47%, followed by Egypt (1.56%) and Iraq (1.30%), only to name a few. It is worth highlighting that these returns are not risk-adjusted, which explains the fact that countries offering high sovereign yields have high Option Adjusted Spreads (OAS) as sketched in the table below, lowering as such the risk adjusted returns. When factoring-in all emerging economies in the Merrill Lynch index, however, Ghana emerged as the highest yield performer with a sovereign return of 2.70% during the month of October, while South Africa suffered the worst yield performance (-1.13%). Lebanon s excess return reached -0.69% in October 2017, ranking eighth among surveyed MENA countries, noting that Tunisia recorded as well the highest excess return of 2.35% and the third highest OAS of 396 bps. Furthermore, the report indicated that option adjusted spreads on Lebanon s External Sovereign Debt expanded to 451 basis points (bps) in October, up from 434 bps in September. However, the weight assigned to Lebanon in Merrill Lynch s Emerging Markets external debt index contracted to 2.53%, down from 2.64% in the previous month, as captured in the following analysis: Lebanon's Sovereign External Debt Month of September 2017 Month of October 2017 Returns (%) 0.22-0.80 Excess Return (%) 1.01-0.69 Option Adjusted Spreads (bps) 434.0 451.0 Lebanon's Weight in the Index (%) 2.64 2.53 Source: M errill Lynch, Credit Libanais Economic Research Unit Total Return on Sovereign External Debt in MENA Countries in October 2017 Country Returns (%) MENA Rank OAS (bps) Excess Return (%) MENA Rank Tunisia 2.47 1 396 2.35 1 Egypt 1.56 2 368 1.69 2 Iraq 1.30 3 477 1.44 3 Bahrain 0.72 4 335 0.85 4 Morocco -0.04 5 148-0.12 5 U.A.E. -0.25 6 100-0.13 6 Qatar -0.66 7 131-0.54 7 Lebanon -0.80 8 451-0.69 8 Turkey -1.06 9 276-0.69 9 Source: M errill Lynch, Credit Libanais Economic Research Unit SOURCE: MERRILL LYNCH, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 6

INDUSTRIAL EXPORTS DROP BY 3.39% Y-O-Y TO $1.65 BILLION YTD AUGUST 2017 According to the Lebanese Ministry of Industry, Lebanon s industrial exports expanded by 5.24% during the month of August 2017 to $227.0 million, compared to $215.7 million in July. On a cumulative basis, however, industrial exports fell by 3.39% y-o-y to nearly $1.65 billion by the end of the first eight months of the current year, down from around $1.71 billion during that same period last year. Concurrently, industrial imports shed 1.68% y-o-y to $164.0 million by August 2017, compared to $166.8 million a year earlier. Evolution of Industrial Exports for the Eight-Month Period Ending Y-O-Y (USD Million) August-2016 August-2017 % Change Industrial Exports 1,712.6 1,654.6-3.39% Industrial Imports of Equipment & Machinery 166.8 164.0-1.68% Source: Ministry of Industry, Credit Libanais Economic Research Unit Evolution of Industrial Exports Evolution of Industrial Imports of Equipment & Machinery $ Million 2,500 2,007.0 $ Million 176 175.5 2,000 1,500 1,000 1,712.6 1,654.6 174 172 170 168 166 164 166.8 164.0 500 162 160 0 YTD August 2015 YTD August 2016 YTD August 2017 158 YTD August 2015 YTD August 2016 YTD August 2017 Source: Ministry of Industry, Credit Libanais Economic Research Unit Source: Ministry of Industry, Credit Libanais Economic Research Unit Exports of machinery and electrical equipment accounted for the bulk (20.01%; $331.1 million) of the total exports bill, followed by prepared foodstuffs and tobacco ($316.5 million <19.13%>) and products of the chemical industries ($273.6 million <16.54%>). On the imports front, China led the list of countries exporting to Lebanon ($39.0 million <23.81%>), followed by Italy ($33.2 million <20.27%>) and Germany ($25.2 million <15.36%>), as elaborated in the section below: Breakdown of Industrial Imports of Equipment & Machinery by Country of Origin YTD August 2017 Country Value ($ Million) China 39.0 Italy 33.2 Germany 25.2 France 8.8 Spain 7.1 Others 50.6 Total Industrial Imports 164.0 Source: M inistry of Industry, Credit Libanais Economic Research Unit Breakdown of Imports of Equipment & Machinery by Country YTD August 2017 Spain 4.32% Others 30.88% France 5.35% Germany 15.36% China 23.81% Italy 20.27% Breakdown of Industrial Exports by Product YTD August 2017 Product Value ($ Million) Machinery and Electrical Equipment 331.1 Prepared Foodstuffs and Tobacco 316.5 Products of the Chemical Industries 273.6 Base Metals and Articles of Base Metal 220.2 Paper & Paperboard and Articles Thereof 102.3 Others 410.9 Total Industrial Exports 1,654.6 Source: M inistry of Industry, Credit Libanais Economic Research Unit Paper & Paperboard and Articles Thereof 6.18% Others 24.83% Breakdown of Industrial Exports by Product YTD August 2017 Base Metals and Articles of Base Metal 13.31% Products of the Chemical Industries 16.54% Machinery and Electrical Equipment 20.01% Prepared Foodstuffs and Tobacco 19.13% SOURCE: THE LEBANESE MINISTRY OF INDUSTRY, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 7

BANKS SHARE OF LBP-DENOMINATED DEBT AT 34.5% IN SEPTEMBER 2017 According to statistics published by the Association of Banks in Lebanon (ABL), gross public debt widened by 1.12% ($863.02 million) during the month of September 2017 to LBP 117,811 billion ($78.15 billion), up from LBP 116,510 billion ($77.29 billion) a month before. The share of Lebanese banks of LBPdenominated debt fell to 34.5% in September (down from 36.2% in August), while that of the non-banking sector rose to 15.5% (up from 15.3% in August) and the share of Banque Du Liban increased to 50.0% (up from 48.5% in August). As far as foreign currency-denominated debt is concerned, sovereign debt in the form of Republic of Lebanon Eurobonds constituted 92.2% of total foreign currency debt, followed by lines of credit obtained through multilateral agreements (4.4%) and bilateral facilities (3.1%). (Billion USD) Sep-2016 Aug-2017 Sep-2017 Monthly % Change Y-O-Y % Change Debt in LBP by Holder 45.63 47.47 48.33 1.82% 5.91% - Banks 18.39 17.18 16.67-2.96% -9.33% - Banque Du Liban 20.03 23.02 24.16 4.97% 20.62% - Non-Banking Sector 7.21 7.26 7.49 3.15% 3.90% Average Maturity (in years) 3.51 3.74 3.72-0.53% 5.98% Weighted Average Interest Rate 6.94% 6.91% 6.90% Debt in FC by Type 29.10 29.82 29.82 0.00% 2.47% - Eurobonds 26.92 27.53 27.49-0.11% 2.14% - Multilateral 1.05 1.28 1.31 2.32% 25.24% - Bilateral 0.99 0.92 0.92 0.00% -6.57% - Others 0.12 0.09 0.09 0.00% -23.15% Average Maturity (in years) 6.28 6.81 6.74-1.03% 7.32% Weighted Average Interest Rate 6.42% 6.40% 6.40% Gross Public Debt 74.73 77.29 78.15 1.12% 4.57% Source: The Association of Banks in Lebanon, Credit Libanais Economic Research Unit Breakdown of Debt in LBP by Holder - as at September 2017 Non-Banking Sector 15.5% Banks 34.5% Breakdown of Debt in FC by Type - as at September 2017 Multilateral, 4.4% Bilateral, 3.1% Others, 0.3% BDL 50.0% Eurobonds, 92.2% Source: ABL, Credit Libanais Economic Research Unit Source: ABL, Credit Libanais Economic Research Unit The average maturity of debt denominated in domestic currency dropped from 3.74 years in August to 3.72 years in September, with the weighted average interest rate also slipping to 6.90%, from 6.91% per annum a month earlier. Similarly, the average maturity of outstanding debt denominated in foreign currencies fell to 6.74 years in September from 6.81 years a month earlier, while the weighted average annual interest rate remained flat at 6.40%. Years 3.8 3.75 3.7 3.65 3.6 3.55 3.5 3.45 3.4 3.35 Evolution of Average Maturity and Weighted Interest Rate of Debt Denominated in LBP Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- 2016 2016 2016 2016 2017 2017 2017 2017 2017 2017 2017 2017 2017 6.96% 6.94% 6.92% 6.90% 6.88% 6.86% 6.84% 6.82% 7.4 7.2 6.8 6.6 6.4 6.2 6 5.8 5.6 5.4 Years 7 Evolution of Average Maturity and Weighted Interest Rate of Debt Denominated in Foreign Currency Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- 2016 2016 2016 2016 2017 2017 2017 2017 2017 2017 2017 2017 2017 6.48% 6.46% 6.44% 6.42% 6.40% 6.38% 6.36% 6.34% Average Maturity Weighted Interest Rate Average Maturity Weighted Interest Rate Source: ABL, Credit Libanais Economic Research Unit Source: ABL, Credit Libanais Economic Research Unit SOURCE: ABL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 8

RESERVES AT BDL REACH $53.84 BILLION IN NOVEMBER 2017 The Lebanese Central Bank s balance sheet revealed some $0.78 billion contraction in the foreign assets (foreign currency reserves) portfolio during the second half of 2017 to $41.90 billion, from $42.68 billion as at mid- 2017, bearing in mind that said reserves have dropped by some $1.58 billion during the month of and which witnessed the resignation of PM Mr. Saad Hariri which was later put on hold. However, the value of gold reserves at BDL appreciated by $84.29 million during the second half of to $11.94 billion, as gold prices increased to a six-week high, propelled by safehaven demand following North Korea s ballistic missile test. On an annual basis, foreign assets at BDL came in 4.05% ($1.63 billion) higher than the $40.27 billion reading reported at end of 2016. Similarly, the value of gold reserves rose by $1.00 billion (9.15%) year-on-year when benchmarked to the $10.94 billion figure recorded in the same period last year. Overall, total reserves (foreign currency and gold) at BDL rose by $2.63 billion annually to $53.84 billion at end of 2017, up from $51.20 billion a year before. These reserves cover around 127.30 months of debt service and constitute around 68.89% and 79.18% of Lebanon s gross and net public debt on a respective basis. $ Billion 2011 2012 2013 2014 2015 2016 2017 Gold 15.83 15.94 11.50 10.93 9.74 10.94 11.94 Foreign Assets 32.31 35.68 35.49 38.73 37.81 40.27 41.90 Total Reserves 48.14 51.61 46.99 49.66 47.56 51.20 53.84 Source: Banque Du Liban, Credit Libanais Economic Research Unit Total Reserves As a % of Gross Public Debt (1) 68.89% As a % of Net Public Debt (1) 79.18% In Months of Debt Service (2) 127.30 (1) As at September 2017 (2) Average Monthly Debt Service as at June 2017 Source: MOF, ABL, Credit Libanais Economic Research Unit Evolution of Total Reserves at Banque Du Liban USD Billion 45.00 41.90 40.27 38.73 37.81 40.00 35.68 35.49 35.00 32.31 30.00 25.00 20.00 15.83 15.94 15.00 11.50 10.93 11.94 9.74 10.94 10.00 5.00 0.00 2011 2012 2013 2014 2015 2016 2017 In a related note, BDL s balance sheet contracted by $1.52 billion during the second half of to $115.93 billion. This comes as a result of the 1.28% drop in total reserves to $53.84 billion coupled with the 5.16% contraction in the securities portfolio to $27.22 billion and the 0.16% decline in the value of fixed assets to $0.24 billion which altogether outweighed the 4.17% hike in loans to the local financial sector to $12.01 billion (an expansion that can be explained by BDL s financial engineering schemes which involved extending low-interest LBP loans to Lebanese banks to be invested in long-term LBP treasury securities), coupled with the 0.82% increase in other assets to $22.63 billion. Gold Foreign Assets Source: Banque Du Liban, Credit Libanais Economic Research Unit $ Billion Mid 2016 2017 2017 Bi-Weekly (% Change) Y-O-Y (% Change) Total Reserves 51.20 54.54 53.84-1.28% 5.14% Securities Portfolio 25.96 28.70 27.22-5.16% 4.85% Loans to Public Sector 0.00 0.00 0.00 0.00% 0.00% Loans to Local Financial Sector 6.29 11.53 12.01 4.17% 91.11% Valuation Adjustment 0.00 0.00 0.00 0.00% 0.00% Other Assets 19.30 22.44 22.63 0.82% 17.22% Fixed Assets 0.22 0.24 0.24-0.16% 7.71% Total Assets 102.98 117.45 115.93-1.29% 12.58% Currency in Circulation Outside BDL 3.30 3.57 3.55-0.77% 7.59% Financial Sector Deposits 83.29 94.89 94.97 0.09% 14.02% Public Sector Deposits 5.67 6.08 5.40-11.20% -4.80% Valuation Adjustment 5.34 6.36 6.42 0.92% 20.14% Other Liabilities 1.88 2.99 2.04-31.77% 8.74% Capital Accounts 3.50 3.56 3.56 0.00% 1.70% Total Liabilities 102.98 117.45 115.93-1.29% 12.58% Source: Banque Du Liban, Credit Libanais Economic Research Unit Loans to Local Financial Sector 10.36% Loans to Public Sector 0.00% Breakdown of BDL's Balance Sheet as at 2017 Valuation Adjustment 0.00% Securities Portfolio 23.48% Other Assets 19.52% Fixed Assets 0.20% Source: BDL, Credit Libanais Economic Research Unit Total Reserves 46.44% In the same vein, the share of gold & foreign currency reserves at BDL of the latter s total assets remained almost stable at 46.44% on a bi-weekly basis at end of 2017, yet lag behind last year s 49.72% reading. SOURCE: BDL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 9

BSE TRADED VALUE DOWN BY 25% Y-O-Y BY NOVEMBER 2017 Activity on the Lebanese stock market lost momentum during the eleventh month of the year as the first three weeks of were plagued by political uncertainties in the aftermath of the sudden resignation of Prime Minister Hariri, which was later put on hold. In figures, volume traded on the BSE plunged by 61.30% during the month of to 3.45 million shares, down from nearly 8.92 million shares a month earlier. In parallel, value traded sank by 44.52% month-on-month to $43.64 million, from around $78.67 million in October. Trades mainly consisted of real estate stocks, which represented 51.43% of the total traded volume, followed by banking (46.77%) and industry & trading (1.79%) stocks. As far as market capitalization is concerned, the latter fell to $10.87 billion as at end of 2017, from $11.27 billion in October and circa $11.95 billion in 2016. Allocation of Traded Volume in 2017 Allocation of Traded Value in 2017 Industry & Trading Sector, 1.79% Industry & Trading Sector 1.96% Real Estate Sector 31.32% Banking Sector, 46.77% Real Estate Sector, 51.43% Banking Sector 66.71% On a cumulative basis, the number of shares changing hands on the BSE dropped by 29.94% y-o-y to just below 71.93 million shares in the eleven-month period ended 2017, with value traded plummeting by 25.17% to $636.25 million. As far as trading multiples are concerned, the weighted average Price to Earnings (P/E) and Price to Book Value (P/BV) multiples of listed stocks ended the month of lower at 7.628x and 0.797x respectively, compared to 7.787x and 0.830x in October. Analysis of the BSE Activity For the Month of October 2017 2017 For the Eleven-Month Period Ended Y-O-Y % 2016 2017 Change Monthly % Change Traded Value ($ 000) 78,667 43,641-44.52% 850,234 636,254-25.17% Traded Volume (000) 8,915 3,451-61.30% 102,660 71,927-29.94% Market Capitalization ($ Million) 11,273 10,872-3.56% 11,947 10,872-9.00% Traded Value/Market Capitalization 0.70% 0.40% 7.12% 5.85% Turnover Ratio 0.51% 0.20% 5.79% 4.10% Source: BSE, Credit Libanais Economic Research Unit Beirut Bourse Cumulative Trading Activity 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 850,234 11,947 102,660 YTD Nov-2016 636,254 10,872 71,927 YTD Nov-2017 12,200 12,000 11,800 11,600 11,400 11,200 11,000 10,800 10,600 10,400 10,200 Traded Value ($ 000) Traded Volume (000) Market Capitalization ($ Million) Overall, trading activity was thin as portrayed by the small turnover ratio (being the number of shares traded divided by total listed shares) of 0.20% in alone and 4.10% during the first eleven months of 2017, compared to 5.79% in the same period last year. SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 10

THE BISRI DAM TO PROVIDE 1.6 MILLION PEOPLE WITH CLEAN WATER The World Bank recently published a feature story titled Clean and Continuous Water for 1.6 Million People in Lebanon in which it conveyed information disclosed by its Regional Director for the Middle East, Mr. Saroj Kumar Jha, pertaining to the Bisri Dam project. According to the feature story, the Bisri Dam project primarily aims at resolving the persisting water shortages across the Greater Beirut and Mount Lebanon region, granting more than 1.6 million people better access to clean water. This would lower households water expenses given their increased reliance on the public water network, which would reduce their need to resort to the more expensive alternative water sources. In fact, Mr. Jha indicated that the Bisri Dam will be collecting rainwater to be stored during the winter season for later usage in the dry season instead of letting it wash off to the sea, with a storage capacity of about 125 million cubic meters. Mr. Jha revealed that the construction of said Dam will span over a period of around 5 years subsequent to the inking of the contract and will be located on the Bisri river. From another standpoint, the feature story pinpointed that international experts have been consulted and involved in this project to insure the safety of the Dam on the geological, seismic, engineering, and environmental fronts, only to name a few. The World Bank s Regional Director for the Middle East further noted that the Bisri Dam project is part of the Lebanese National Strategy of Water, which deemed it as an effective method to benefit from the country s water resources. SOURCE: WORLD BANK, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 11

CORPORATE NEWS ALPHA GROUP OF BANKS POSTS NET PROFITS OF $1.98 BILLION YTD SEPTEMBER 2017 The Lebanese banking sector continues to prove its resilience in the face of the prolonged regional tensions. More specifically, the aggregate net after-tax profits of the Alpha group of banks rallied by 21.36% year-on-year to $1,983.09 million by September 2017, up from $1,634.07 million in the same period last year. It is worth noting that the Alpha group of banks comprises 14 banks having a deposit base exceeding the $2 billion mark each, namely Bank Audi, BLOM Bank, BankMed, Banque Libano- Française, Byblos Bank, Credit Libanais, Bank of Beirut, Bank Beirut & the Arab Countries (BBAC), First National Bank, IBL Bank, Société Générale de Banque au Liban, Fransabank, Lebanon and Gulf Bank, and CreditBank. In details, the group witnessed some 3.31% y-o-y increase in net interest income to $2.91 billion and some three-fold rally in other operating income to $361.58 million which were diluted by the sharp 49.47% drop in net fee and commission income to $646.08 million and the 13.01% decline in net gains on financial instruments to $801.25 million. Consequently, net operating income contracted by 6.20% on an annual basis to $4.42 billion by September 2017, met by a parallel 11.06% drop in operating expenses to $2.17 billion. On the balance sheet front, the consolidated assets of Alpha banks rose by 4.83% in the first nine months of 2017 to around $226.98 billion (compared to a 4.46% increase for the local banking sector), up from $216.52 billion as at year-end 2016, fueled by the 2.59% increase in the portfolio of net loans & acceptances (compared to some 3.06% rise for the local banking sector) to $66.49 billion. In the same vein, customer deposits widened by 3.98% (in comparison with an equal growth for the local banking sector) in the first nine months of 2017 to just below $181.82 billion from $174.86 billion at end of year 2016. More specifically, Alpha group s domestic customer deposits grew by 4.56% to $154.68 billion YTD September 2017, while non-resident deposits rose at a slower pace of 0.74% to $27.13 billion. In this context, the Alpha group s ratio of net loans to customer deposits fell slightly to 36.57% by end of September 2017 (compared to local sector average of 34.05%), with shareholders equity propelling 2.82% higher (compared to a local banking sector increase of 2.25%) at just above $20.81 billion. From an asset quality standpoint, the ratio of gross doubtful loans to gross loans rose from 5.61% at end of 2016 to 5.99% by end of September of the current year mirroring a small deterioration in the quality of the loans portfolio noting that the coverage ratio of doubtful loans stood at 71.84%. As far as profitability ratios are concerned, the Alpha group reported annualized returns on average assets (ROaA) and average equity (ROaE) of 1.19% and 12.88% respectively. It is worth noting that the branch network of Alpha banks added 14 new branches since the beginning of 2017 to 1,202 branches by end of September of this year, with the number of employees in the Alpha group increasing by 707 to 31,202. Consolidated Financial Performance of Alpha Group of Banks As at end of September 2017 YTD % Change In Millions of USD 2016 Key Balance Sheet Figures Total Assets 216,516.30 226,981.68 4.83% Net Loans & Acceptances 64,812.80 66,490.08 2.59% Customer Deposits 174,862.93 181,815.78 3.98% Shareholders' Equity 20,241.75 20,811.70 2.82% Key Ratios (%) Net Loans & Acceptances to Customer Deposits 37.06% 36.57% Primary Liquidity to Assets 35.20% 39.06% Gross Doubtful Loans to Gross Loans 5.61% 5.99% Coverage Ratio of Doubtful Loans 74.51% 71.84% Collective Provisions to Net Loans 1.56% 1.71% In Millions of USD YTD September 2016 YTD September 2017 Y-O-Y % Change Key P&L Figures Net Interest Income 2,812.85 2,905.95 3.31% Net Commission and Fee Income 1,278.59 646.08-49.47% Net Gain on Financial Instruments 921.08 801.25-13.01% Other Operating Income 94.20 361.58 283.85% Net Operating Income 4,711.53 4,419.27-6.20% Total Operating Expenses 2,443.95 2,173.53-11.06% Net Profits 1,634.07 1,983.09 21.36% Key Ratios (%) Cost to Income 49.70% 44.89% ROaA 1.04% 1.19% ROaE 11.62% 12.88% Source: Bankdata, Credit Libanais Economic Research Unit SOURCE: BANKDATA, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 12

MONETARY PERFORMANCE MONETARY AGGREGATES All monetary aggregates ended the week of 16, 2017 on a negative note. In fact, the overall money supply, M4, plunged by LBP 1,475.11 billion on a weekly basis, yet soared by 5.70% on an annual basis to LBP 217,715 billion, noting that the non-banking sector s Treasury bills portfolio fell by LBP 9 billion during the concerned week. Concurrently, Lebanese-pound denominated deposits and currency in circulation, M1, narrowed by LBP 252.78 billion week-on-week to LBP 9,562 billion on the back of some LBP 161 billion contraction in money in circulation, accompanied by a LBP 92 billion slump in demand deposits. On a yearly basis, M1 receded by 1.93%. Local currency term deposits, M2, also sank by LBP 2,168.98 billion on a weekly basis and by 2.39% year-on-year to settle at LBP 79,444 billion. This substantial week-on-week drop in M2 owes primarily to depositors prolonged flocking to convert their LBP deposits to the U.S. Dollar before Prime Minister Saad Hariri put on hold his resignation. Consequently, private sector term and saving deposits denominated in LBP ( M2-M1 ) fell by LBP 1,916.20 billion (2.67%) during the aforementioned week to LBP 69,882 billion, while deposits denominated in foreign currencies ( M3-M2 ) rose by LBP 702.98 billion (0.56%) to LBP 127,156 billion amid the aforementioned rush to convert part of LBP deposits to the U.S. Dollar. Money Supply LBP Billion 9, 2017 16, 2017 % Change M1 9,814 9,562-2.58% M2 81,613 79,444-2.66% M3 208,066 206,600-0.70% M4 219,190 217,715-0.67% M2- M1 71,799 69,882-2.67% M3- M2 126,453 127,156 0.56% Source: Banque Du Liban, Credit Libanais Economic Research Unit MONEY MARKETS The 23 rd Treasury bill auction raised LBP 536.546 billion ($355.92 million), compared to LBP 157.071 billion ($104.19 million) in the auction of the previous week. The majority of subscriptions (84.00%) was concentrated in the ten-year to maturity T-bonds, followed by the two-year (12.15%) and six-month (3.85%) tenure treasury securities. Consequently, the weighted average yield on Lebanese Pound Treasury bills stood at 7.17% in the auction of 23. The yields on the six-month, two-year, and ten-year to maturity Treasury securities remained flat at 4.99%, 5.84%, and 7.46% respectively. 23, 2017 Lebanese Treasury Bills Yield (%) Face Value (in billions of LBP) % of Total Face Value 6 Months 4.99% 20.648 3.85% 24 Months 5.84% 65.192 12.15% 120 Months 7.46% 450.706 84.00% Total 536.546 100.00% Source: Reuters, Credit Libanais Economic Research Unit Lebanese Treasury Bills 3 Months 6 Months 12 Months 24 Months 36 Months 60 Months 84 Months 120 Months Treasury Yield 4.44% 4.99% 5.35% 5.84% 6.50% 6.74% 7.08% 7.46% 250,000 200,000 150,000 Money Supply - LBP Billion - 219,190 217,715 208,066 206,600 9, 2017 16, 2017 M4 M3 Source: BDL, Credit Libanais Economic Research Unit 8.00% 7.50% 7.00% 6.50% 6.00% On The Run Yield Curve 24 Months 36 Months 84 Months 60 Months 120 Months 5.50% 5.00% 6 Months 12 Months 4.50% 3 Months 4.00% 3.50% 3.00% 0 1 2 3 4 5 6 7 8 9 SOURCE: BDL, REUTERS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 13

LEBANESE EQUITIES LEBANESE EQUITIES Beirut Stock Exchange activity reversed its upturn this week, with the number of shares changing hands plunging to 283,463 shares, from 1,106,255 shares a week before, and traded value sinking to just below $3.09 million, from $20.52 million a week earlier. Trades were mainly concentrated in the real estate sector, which accounted for 61.20% of total weekly volume. Concurrently, the average daily trading volume fell to 70,866 shares this week, from 276,564 shares last week. In parallel, the average daily trading value narrowed to $0.77 million, from $5.13 million a week earlier. Five gainers and three losers were screened this week, lifting the BSE s market capitalization up by 0.68% week-on-week to nearly $10.86 billion and the Credit Libanais Aggregate Stock Index ( CLASI ) 0.81% higher to 1,052.77. Credit Libanais Week of Week of Weekly YTD Indices 24-Nov-17 1-Dec-17 % Change % Change C redit Libanais Aggregate Stock Index <.CLASI> Credit Libanais Financial Sector Stock Index <.CLFI> C redit Libanais Construction Sector Stock Index <.CLCI> Index Value 1,250 1,200 1,150 1,100 1,044.26 1,052.77 0.81% -9.10% 1,416.47 1,428.43 0.84% -7.05% 461.98 465.18 0.69% -17.71% Credit Libanais Aggregate Stock Index Weekly Performance CLASI In the real estate sector, trades mainly consisted of Solidere A and B shares (55.65% of total traded volume), with the price of Solidere A increasing by 1.26% to $8.02 and that of Solidere B appreciating by 1.53% to $7.95. The price of Holcim (Liban) shares, however, shed 2.27% week-onweek to $14.66. In this context, the Credit Libanais Construction Sector Stock Index ( CLCI ) ended Friday s session 0.69% higher week-on-week at 465.18. In the banking sector, BLOM Bank GDRs amassed the highest concentration of trades (20.20% of total traded volume) on a thin turnover ratio of 0.08%. The Credit Libanais Financial Sector Stock Index ( CLFI ) rose by 0.84% on a weekly basis to 1,428.43. This comes as a result of the 1.82% increase in the price of Bank Audi GDRs to $5.60, coupled with some 1.47% appreciation in the price of BLOM Bank listed shares to $11.06 and a 2.04% hike in the price of BLOM Bank GDRs to $11.49. 1,050 1,000 CLASI 0.81% 01-Dec-16 22-Jan-17 15-Mar-17 06-May-17 27-Jun-17 18-Aug-17 09-Oct-17.CLASI Credit Libanais Aggregate Stock Index Friday, December 01, 2017 Value Daily % Chng Daily Net Chng 1,052.77-0.161% -1.69 Yr.High Year Hi.Date Yr.Low Year.Lo.Date 1,193.28 31-Mar-17 1,025.16 20-Nov-17 Life High Life Hi.Date Life Low Life.Lo.Date 1,801.01 7-Jul-08 836.11 25-Mar-09 30-Nov-17 Credit Libanais Financial Sector Stock Index Weekly Performance CLFI Credit Libanais Construction Sector Stock Index Weekly Performance CLCI 1,700 700 1,650 650 1,600 Index Value 1,550 1,500 1,450 1,400 1,350 1,300 01-Dec-16 22-Jan-17 CLFI 0.84% 15-Mar-17 06-May-17 27-Jun-17 18-Aug-17 09-Oct-17 30-Nov-17 Index Value 600 550 500 450 400 01-Dec-16 CLCI 0.69% 22-Jan-17 15-Mar-17 06-May-17 27-Jun-17 18-Aug-17 09-Oct-17 30-Nov-17 SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 14

LEBANESE EQUITIES BEIRUT STOCK EXCHANGE Closing Weekly %Change Weekly Volume Traded % of Weekly Volume Traded Lebanese Equities Weekly Value Traded % of Weekly Value Traded Total Listed Shares Market Capitalisation ($000) Solidere A $8.02 1.26% 97,059 34.24% $778,630 25.22% 100,000,000 802,000 17.43 0.66-22.74% - - -22.74% Solidere B $7.95 1.53% 60,701 21.41% $480,021 15.55% 65,000,000 516,750 17.28 0.65-24.29% - - -24.29% BLC Bank $0.93 0.00% - - - - 71,033,333 66,061 4.89 0.52-6.06% - - -6.06% BLC Bank Preferred Class "B" $100.00 0.00% - - - - 550,000 55,000 n.a n.a 0.00% 7.00% 6.65% 6.65% BLC Bank Preferred Class "C" $100.00 0.00% - - - - 350,000 35,000 n.a n.a 0.00% 6.75% 6.41% 6.41% BLC Bank Preferred Class "D" $100.00 0.00% - - - - 750,000 75,000 n.a n.a 0.00% 1.84% 1.75% 1.75% Bank Audi - Listed Shares $5.50 0.00% 3,570 1.26% $19,635 0.64% 399,749,204 2,198,621 5.45 0.74-19.12% 9.09% 8.64% -10.48% Bank Audi GDR $5.60 1.82% 7,100 2.50% $39,770 1.29% 119,924,761 671,579 5.54 0.75-13.85% 8.93% 8.48% -5.36% Bank Audi Preferred "G" $100.30-0.40% 1,400 0.49% $140,420 4.55% 1,500,000 150,450 n.a n.a -1.86% 5.98% 5.68% 3.82% Bank Audi Preferred "H" $100.40-0.59% 2,000 0.71% $200,700 6.50% 750,000 75,300 n.a n.a -1.86% 6.47% 6.15% 4.29% Bank Audi Preferred "I" $100.10 0.00% - - - - 2,500,000 250,250 n.a n.a 0.10% 3.00% 2.85% 2.95% Bank Of Beirut - Listed Shares $18.80 0.00% - - - - 17,746,417 333,633 9.35 1.07 0.00% 3.53% 3.35% 3.35% Bank Of Beirut Priority Shares 2014 $21.00 0.00% - - - - 4,762,000 100,002 10.45 1.20 0.00% 7.16% 7.00% 7.00% Bank Of Beirut Preferred "H" $25.65 0.00% - - - - 5,400,000 138,510 n.a n.a -2.29% 6.82% 6.48% 4.20% Bank Of Beirut Preferred "I" $25.50 0.00% - - - - 5,000,000 127,500 n.a n.a -2.86% 6.62% 6.29% 3.43% Bank Of Beirut Preferred "J" $25.65 0.00% 7,800 2.75% $200,070 6.48% 3,000,000 76,950 n.a n.a -2.29% 6.34% 6.02% 3.73% Bank Of Beirut Preferred "K" $25.35 0.00% - - - - 4,000,000 101,400 n.a n.a 0.40% 2.25% 2.14% 2.53% Byblos Bank - Listed Shares $1.60 0.00% - - - - 565,515,040 904,824 7.62 0.65-5.88% 8.29% 7.88% 1.99% Byblos Bank Preferred Class 2008 $101.30 0.00% - - - - 2,000,000 202,600 n.a n.a -1.27% 7.90% 7.50% 6.24% Byblos Bank Preferred Class 2009 $102.00 0.00% - - - - 2,000,000 204,000 n.a n.a 0.69% 7.84% 7.45% 8.14% Byblos Bank GDR $77.70 0.00% - - - - 1,309,078 101,715 7.40 0.63-2.88% 8.54% 8.11% 5.24% BEMO Bank - Listed Shares $1.30 0.00% - - - - 51,400,000 66,820 5.20 0.60-23.53% 4.08% 3.88% -19.65% BEMO Bank Preferred Class 2013 $99.75 0.00% - - - - 350,000 34,913 n.a n.a 0.50% 7.02% 6.67% 7.17% BLOM Bank GDR $11.49 2.04% 57,246 20.20% $657,711 21.30% 73,896,010 849,065 5.37 0.87 4.45% 8.66% 8.23% 12.68% BLOM Bank Listed Shares $11.06 1.47% 30,875 10.89% $340,145 11.02% 215,000,000 2,377,900 5.17 0.84 4.34% 9.00% 8.55% 12.89% RYMCO Class "B" $3.25 0.00% - - - - 10,920,000 35,490 14.77 1.67 0.00% 3.29% 3.12% 3.12% Holcim Liban $14.66-2.27% 15,712 5.54% $230,637 7.47% 19,516,040 286,105 7.52 1.42 24.77% 17.15% 16.29% 41.06% Ciment Blancs Nominal $2.16 0.00% - - - - 9,000,000 19,440 5.68 0.94 37.58% 22.42% 21.30% 58.88% Note: n.a stands for not applicable Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit Activity Analysis Previous Last % Change Value Traded ($) 20,520,678 3,087,739-84.95% Volume Traded 1,106,255 283,463-74.38% Average Daily Trading Value ($) 5,130,170 771,935-84.95% Average Daily Trading Volume 276,564 70,866-74.38% Market Cap - BSE ($) 10,783,374,044 10,856,877,149 0.68% Weighted Average P/E 7.514 7.581 0.88% Weighted Average P/BV 0.791 0.796 0.68% Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit 8 6 4 2 0 P/E P/BV YTD Price Perf. Gross Dividend Yield Net Dividend Yield Evolution of Beirut Bourse Comparable Benchmarks 7.514 7.581 0.791 0.796 Nov 24, 2017 Dec 1, 2017 YTD Total Net Return P/E P/BV Source: BSE, Credit Libanais Economic Research Unit The market-cap weighted average price to earnings (P/E) and price to book (P/BV) multiples of listed stocks ended their week higher at 7.581x and 0.796x respectively as the recovery of stock prices continued for the second week in a row. SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 15

LEBANON S MAIN INDICATORS Recap of Lebanon's Major Indicators 2010 2011 2012 2013 2014 2015 2016 2017 MACROECONOMIC INDICATORS GDP (Current Prices) ($ Billion) 38.42 40.08 43.87 46.01 47.83* 49.46* 50.46* 52.70* Real GDP Growth Rate 8.04% 0.92% 2.80% 2.64% 2.00%* 0.82%* 1.00%* 1.50%* GDP per Capita (Current Prices) ($) 8,850 9,144 9,914 10,399* 10,810* 11,178* 11,295* 11,684* Foreign Direct Investment Inflows ($ Billion) 3.75 3.14 3.11 2.66 2.91 2.35 2.56 FDI/GDP Ratio 9.76% 7.84% 7.09% 5.78% 5.84% 4.71% 5.13% INDUSTRY Industrial Exports ($ Million) 3,291 3,530 3,567 3,384 3,150 2,956 2,527 1,654.6 (3) Import of Industrial Machinery ($ Million) 227 239 288 300 269 234 236 164.0 (3) TOURISM Total Number of Tourists 2,167,989 1,655,051 1,365,845 1,274,362 1,354,647 1,517,927 1,688,357 1,449,517 (4) Growth in Tax-Free Spending 21% 10% -6% 4% 8% 2% -9% 7% (4) REAL ESTATE Value of Real Estate Transactions ($ Million) 9,479 8,841 9,175 8,708 8,952 8,006 8,482 8,155 (5) Number of Real Estate Sales Transactions 94,202 82,984 74,569 69,198 70,721 63,386 64,248 60,276 (5) Construction Permits (000 sqm) 15,187 13,890 12,362 10,527 11,159 10,294 9,935 8,081 (5) Cement Delivery (000 tons) 5,227 5,550 5,309 5,831 5,517 5,043 5,265 3,788 (4) TRANSPORTATION Beirut Port: Freight Activity (000 Tons) 6,469 6,677 7,225 8,268 8,281 7,240 8,737 7,107 (5) Beirut Airport: Number of Passengers (million) 5.55 5.65 5.96 6.26 6.57 8.22 7.61 6.40 (4) FOREIGN TRADE Imports ($ Million) 17,964 20,158 21,280 21,228 20,494 18,069 18,705 13,888 (4) Exports ($ Million) 4,253 4,265 4,483 3,936 3,313 2,952 2,977 2,114 (4) Trade Balance ($ Million) (13,711) (15,893) (16,797) (17,292) (17,181) (15,117) (15,729) (11,774) (4) BALANCE OF PAYMENTS Net Foreign Assets at the Financial Sector ($ Million) 3,325 (1,996) (1,537) (1,127) (1,407) (3,354) 1,238 (190) (4) Foreign Assets at BDL ($ Billion) 30.85 32.24 35.74 35.29 37.86 37.09 40.71 41.90 (7) Go ld Re se rve s a t BDL ($ Billio n) 13.01 14.40 15.31 11.10 10.9 5 9.85 10.71 11.9 4 (7) PUBLIC FINANCE Government Expenditures ($ Million) 11,336 11,675 13,321 13,640 13,952 13,528 14,867 6,968 (1) Government Revenues ($ Million) 8,414 9,333 9,396 9,420 10,879 9,576 9,923 6,060 (1) Budget Primary Deficit / Surplus ($ Million) 1,203 1,662 (110) (240) 1,307 724 21 1,630 (1) Total Deficit ($ Million) (2,894) (2,342) (3,925) (4,220) (3,073) (3,952) (4,944) (908) (1) Deficit / GDP Ratio 7.53% 5.84% 8.95% 9.17% 6.16% 7.78% 9.54% Debt Service / GDP Ratio 10.74% 9.99% 8.25% 8.24% 8.78% 9.21% 9.58% Net Public Debt ($ Billion) 45.01 46.35 49.12 53.18 57.30 61.54 65.42 67.99 (4) Gross Public Debt/GDP Ratio 136.92% 133.89% 131.49% 137.95% 139.16% 142.18% 148.72%* 152.29%* MONETARY AGGREGATES & INFLATION M4 ($ Billion) 97.31 103.50 110.00 117.41 124.53 131.17 139.20 144.42 (6) (M2-M1) ($ Billion) 35.66 35.82 39.32 40.56 43.27 46.25 47.95 46.36 (6) Monetization Level (M2/GDP Ratio) 102.36% 99.32% 99.97% 98.97% 97.40% 102.46% 105.06% Change in CPI (%) 6.19% 4.27% 4.68% 2.05% -1.66% -3.40% 3.14% 4.62% (5) BANKING SYSTEM Number of Commercial Banks 54 54 54 56 55 53 50 49 (1) Number of Branches 912 948 962 985 1,020 1,039 1,056 1,057 (1) Total Assets ($ Million) 128,925 140,576 151,883 164,821 175,697 185,989 204,311 213,424 (4) Total Deposits ($ Million) 108,601 117,703 127,657 139,166 147,637 154,951 166,446 173,069 (4) Loans to the Private Sector ($ Million) 34,929 39,375 43,452 47,381 50,899 54,224 57,180 58,929 (4) Customer Loans/ Deposits 32.16% 33.45% 34.04% 34.05% 34.48% 34.99% 34.35% 34.05% (4) Dollarization Rate 63.24% 65.92% 64.82% 66.14% 65.71% 64.88% 65.82% 66.90% (4) Exchange Rate (LBP to USD) 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 1,507.50 * Figures Reflect IMF Estimates (1) As at June, 2017, (2) As at July, 2017, (3) As at August, 2017, (4) As at September, 2017, (5) As at October, 2017, (6) As at 16, 2017, (7) As at, 2017 SOURCE: CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 16

LEBANON S RATINGS Republic Of Lebanon Sovereign Ratings Rating Agency Tenor Rating Outlook Standard & Poor's Global Ratings Long- Term B- Short- Term B Stable Moody's Investors Service Long- Term B3 Long- Term B- Fitch Ratings Short- Term B Source: Fitch Ratings, Moody's Investors Service, S&P Global Ratings Stable Stable Lebanese Banks' Latest Ratings Rated Banks Moody's Investors Service Fitch Ratings S&P Global Ratings Long Term Foreign Currency Outlook Long Term IDR Outlook Long-Term Counterparty Credit Rating Short-Term Counterparty Credit Rating Outlook Bank Audi B3 Stable B- Stable B- C Stable BLOM Bank B3 Stable - - B- - Stable Byblos Bank B3 Stable B- Stable - - - BankMed - - - - B- C Stable Source: Fitch Ratings, Moody's Investors Service, S&P Global Ratings SOURCE: FITCH, MOODY S, S&P RATINGS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 17

CONTACTS RESEARCH Fadlo I. Choueiri, CFA fchoueiri@cl.com.lb 961-1-608 000 EXT: 1280 Jad Abi Haidar, CFA jabihaidar@cl.com.lb 961-1-608 000 EXT. 1283 Joelle Samaha jsamaha@cl.com.lb 961-1-608 000 EXT. 1281 Mayda Zaarour mzaarour@cl.com.lb 961-1-608 000 EXT. 1282 Nagham Abdel Ahad nabdelahad@cl.com.lb 961-1-608 000 EXT. 1284 MONEY MARKETS DESK Robert Araman raraman@cl.com.lb 961-1-608 000 EXT. 0760 This document is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. This document does not constitute an offer or invitation to subscribe to or purchase any security, and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. Reasonable care has been taken to ensure that the facts stated herein are accurate and the estimates, opinions and expectations contained herein are fair and reliable. ECONOMIC RESEARCH UNIT - ADLIEH, BEIRUT LEBANON - TEL: 01-608000 FAX: 01-608231 18