CREDIT LIBANAIS S.A.L.

CREDIT LIBANAIS S.A.L. Issue No. 591 March 10 th March 16 th 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 88 TH IN THE WORLD IN THE RANKING OF HAPPINESS OVER THE 2015-2017 PERIOD 1 > BEIRUT RANKS 158 TH IN THE WORLD IN EXPATISTAN S COST OF LIVING INDEX 2 > VALUE OF REAL ESTATE SALE TRANSACTIONS UP BY 3.41% Y-O-Y BY FEBRUARY 3 > BUDGET DEFICIT NARROWS TO $3.38 BILLION BY NOVEMBER 2017 4 > COMMERCIAL BANKS ASSETS NEAR $223 BILLION AT END OF JANUARY 5 > GROSS PUBLIC DEBT AT $80.39 BILLION IN JANUARY 6 > CLEARED CHECKS VOLUME AT 1.93 MILLION BY FEBRUARY 7 > NUMBER OF PAYMENT CARDS REACHES 2.63 MILLION AT END OF 2017 8 > CEMENT DELIVERIES DOWN BY 10.61% Y-O-Y IN JANUARY 9 > THE COINCIDENT INDICATOR UP BY 4.10% Y-O-Y IN JANUARY 9 > RESERVES AT BDL REACH $55.61 BILLION AS AT MID-MARCH 10 > NEW CAR SALES SETTLE 4.78% LOWER Y-O-Y BY FEBRUARY 11 > BEIRUT PORT ACTIVITY UP 1.47% Y-O-Y BY FEBRUARY 12 CORPORATE NEWS > MOODY S RELEASES CREDIT OPINION ON BANK AUDI 13 > EBRD ACQUIRES A STAKE IN BANK AUDI 13 MONETARY PERFORMANCE > MONETARY AGGREGATES 14 > MONEY MARKETS 14 LEBANESE EQUITIES > LEBANESE EQUITIES & CREDIT LIBANAIS INDICES 15 LEBANON'S ECONOMIC & FINANCIAL SECTOR INDICATORS 17 LEBANON'S RATINGS 18 LEBANON 88 TH IN THE WORLD IN THE RANKING OF HAPPINESS OVER THE 2015-2017 PERIOD According to the United Nations World Happiness Report, Lebanon scored 5.199 on the level of overall happiness over the 2015-2017 period, which placed it 9 th regionally and 88 th globally. BEIRUT RANKS 158 TH IN THE WORLD IN EXPATISTAN S COST OF LIVING INDEX Beirut ranked 6 th in the Middle East region and 158 th in the world in Expatistan s Cost of Living Index with a score of 128. VALUE OF REAL ESTATE SALE TRANSACTIONS UP BY 3.41% Y-O-Y BY FEBRUARY The number of real estate transactions in Lebanon appreciated by 2.25% y-o-y to 9,819 by February, with the value of transactions increasing by 3.41% to $1.32 billion. BUDGET DEFICIT NARROWS TO $3.38 BILLION BY NOVEMBER 2017 Lebanon s fiscal deficit (Budgetary & Treasury) narrowed to $3.38 billion during the eleven-month period ended November 2017, down from $4.40 billion a year before. COMMERCIAL BANKS ASSETS NEAR $223 BILLION AT END OF JANUARY The combined balance sheet of commercial banks operating in Lebanon widened by 1.24% during the first month of to $222.59 billion, up from $219.86 billion at end of year 2017. 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 End of 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 88 TH IN THE WORLD IN THE RANKING OF HAPPINESS OVER THE 2015-2017 PERIOD The United Nations (UN) recently released its 6 th version of the World Happiness Report (WHR) presenting a landmark survey of the state of happiness across 156 countries and of happiness of immigrants across 117 countries. The main purpose of the report is to examine the science of measuring and understanding subjective well-being while presenting updated rankings and analysis of life evaluations throughout the world. In detail, the report calculates its rankings using data compiled by the Gallup World Poll, which is based on the responses of individuals (assigning ratings that range between 0 (worst) and 10 (best)) to central life evaluation questions structured in surveys conducted over the three-year 2015-2017 period. Moreover, national average life evaluations rankings in the WHR are accompanied by the citation of six major variables namely, GDP per capita, social support, healthy life expectancy, social freedom, generosity, and absence of corruption, that contribute to explaining and understanding the attained national average scores. Therefore, the report attempts to find an evident link or relation between the results it reached and said variables. With respect to the results of the report, and on a global level, Finland topped the list of countries in terms of happiness over the 2015-2017 period with a score of 7.632, emerging as well as best performer on the level of immigrant happiness during the 2005-2017 period with a score of 7.662. Norway and Denmark ranked 2 nd and 3 rd respectively in overall happiness with a score of 7.594 and 7.555, while the two exchanged ranks on the level of immigrant happiness with Denmark scoring 7.547 and Norway scoring 7.435. Regionally, Gulf States were the top-performing countries in terms of overall happiness over the 2015-2017 as well as immigrant happiness over the 2005-2017 surveyed period. In specific, the United Arab Emirates (UAE) led the former s list (global rank: 20; score: 6.774) followed by Qatar (global rank: 32; score: 6.374) and Saudi Arabia (global rank: 33; score: 6.371) while Oman led the latter s list (global rank: 16; score: 6.829) followed by the UAE (global rank: 19; score: 6.685) and Qatar (global rank: 26; score: 6.395). As far as Lebanon is concerned, the country scored 5.199 in the overall happiness metric over the covered three-year period which placed it 9 th regionally and 88 th globally. Moreover, Lebanon ranked 10 th regionally and 69 th worldwide on the immigrant happiness front over the 2005-2017 period with a score of 5.116. It is worth mentioning that the country recorded a 0.185 improvement in its national average happiness score from the 2008-2010 to the 2015-2017 period, always according to the UN WHR. World Happiness Report Rankings Ranking of Happiness (2015-2017) Happiness Ranking for the Foreign-Born (2005-2017) Country Score Global Rank Country Score Global Rank Finland 7.632 1 Finland 7.662 1 Norway 7.594 2 Denmark 7.547 2 Denmark 7.555 3 Norway 7.435 3 United Arab Emirates 6.774 20 Oman 6.829 16 Qatar 6.374 32 United Arab Emirates 6.685 19 Saudi Arabia 6.371 33 Qatar 6.395 26 Bahrain 6.105 43 Bahrain 6.240 33 Kuwait 6.083 45 Kuwait 6.207 34 Libya 5.566 70 Saudi Arabia 6.155 35 Algeria 5.295 84 Jordan 5.345 58 Morocco 5.254 85 Egypt 5.277 62 Lebanon 5.199 88 Libya 5.187 65 Jordan 5.161 90 Lebanon 5.116 69 Somalia 4.982 98 Iraq 5.003 73 Palestinian Territories 4.743 104 Mauritania 4.733 84 Tunisia 4.592 111 Palestinian Territories 4.689 86 Iraq 4.456 117 Yemen 4.584 88 Egypt 4.419 122 Sudan 4.325 101 Mauritania 4.356 126 Djibouti 4.139 105 Sudan 4.139 137 Comoros 3.911 113 Syria 3.462 150 Syria 3.516 117 Yemen 3.355 152 Source: United Nations, Credit Libanais Economic Research Unit SOURCE: UNITED NATIONS, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 1

BEIRUT RANKS 158 TH IN THE WORLD IN EXPATISTAN S COST OF LIVING INDEX Expatistan, an international cost of living calculator, released its latest Cost of Living Index results dated March 15, in which it compared 342 cities across the globe based on their index scores when benchmarked to that of Prague (Prague being therefore the central reference city with a score of 100). The assessment of a city s cost of living takes into account the prices of a basket of goods and services categorized under Food, Housing, Clothes, Transportation, Personal Care, and Entertainment. In this context, Hamilton Bermuda emerged as the most expensive city in the world with a Cost of Living Index score of 298, followed by Geneva Switzerland (score: 255), Reykjavik Iceland (score: 241), Zurich Switzerland (score: 241), and New York City United States (score: 228), only to name a few. The world s least expensive cities, on the other hand, were Jaipur India (score: 53), Kochi India (score: 56), and Baku Azerbaijan (score: 60). On a regional basis, Doha Qatar turned out to be the Middle East s most expensive city with an index score of 172 (thus ranking 45 th in the world), followed by Dubai United Arab Emirates (score: 171; international ranking: 46) and Abu Dhabi United Arab Emirates (score: 159; international ranking: 65). As far as Lebanon is concerned, Beirut ranked 6 th in the region and 158 th in the world with a Cost of Living Index score of 128. Beirut was considered as the most expensive city in the Middle East in terms of basic lunchtime menu (including a drink) in the business district and as the second most expensive city in the region in terms of 1 min. of prepaid mobile tariff (no discounts or plans), 1 pair of men s leather business shoes, laundry detergent (3 liters ~ 100 oz.), and 1 liter (1 qt.) of whole fat milk. Beirut also came in as the third most expensive city in the Middle East in terms of combo meal in fast food restaurant (Big Mac Meal or similar). Expatistan's Cost of Living Index City Country Ranking Score Hamilton Bermuda 1 298 Geneva Switzerland 2 255 Reykjavik Iceland 3 241 Zurich Switzerland 4 241 New York City United States 5 228 London U.K. 7 226 Washington D.C. United States 13 211 Sydney Australia 14 210 Paris France 16 206 Munich Germany 50 170 Rome Italy 84 149 Berlin Germany 87 149 Barcelona Spain 91 148 Madrid Spain 125 137 Beirut Lebanon 158 128 Montreal Canada 163 127 Shanghai China 168 126 Minsk Belarus 338 63 Yerevan Armenia 339 63 Baku Azerbaijan 340 60 Kochi India 341 56 Jaipur India 342 53 *Figures Latest Update: March 15, Source: Expatistan, Credit Libanais Economic Research Unit Expatistan's Cost of Living Index in Major Cities in the Middle East Doha Dubai Abu Dhabi Kuwait City Jeddah Beirut Amman Manama Muscat Riyadh 138 133 128 122 112 111 104 159 172 171 0 50 100 150 200 * Figures Latest Update: March 15, Source: Expatistan, Credit Libanais Economic Research Unit SOURCE: EXPATISTAN, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 2

VALUE OF REAL ESTATE SALE TRANSACTIONS UP BY 3.41% Y-O-Y BY FEBRUARY The Lebanese real estate sector witnessed a dull momentum during the second month of the year with a smaller volume of new transactions compared to January. In detail, the number of transactions plunged by 16.33% in February to 4,473, down from 5,346 transactions in the previous month. Concurrently, the value of real estate transactions dropped by 7.78% month-on-month to $0.63 billion, from $0.68 billion in January. As a result, the average value per transaction rose by 10.22% in February from $128,018 to $141,103. In contrast, and on a cumulative basis, the number of real estate transactions appreciated by 2.25% y-o-y to 9,819 by February from 9,603 transactions in the same period last year, with the value of transactions increasing by 3.41% to $1.32 billion. The average value per transaction similarly grew by 1.14% y-o-y to $133,979 by February, from $132,473 a year before. In contrast, the share of sales to foreigners dropped to 1.70% by February from 1.85% in full-year 2017. Real Estate Transactions For the Month of January For the Month of February Monthly % Change YTD February 2017 YTD February Y-O-Y % Change Number of Sale Transactions 5,346 4,473-16.33% 9,603 9,819 2.25% Value of Transactions (USD Billion) 0.68 0.63-7.78% 1.27 1.32 3.41% Average Value per Transaction (USD) 128,018 141,103 10.22% 132,473 133,979 1.14% Source: General Directorate of Land Registry and Cadastre, Credit Libanais Economic Research Unit Evolution of Value & Volume of Real Estate Transactions Sales to Foreigners as a Percentage of Total Sales 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 94,320 82,984 9.48 74,569 69,198 8.84 70,721 9.18 8.71 8.95 73,541 63,386 64,248 9.95 8.01 8.48 1.32 9,819 2010 2011 2012 2013 2014 2015 2016 2017 YTD February Value of Transactions ($ Billion) Number of Transactions $ Billion 12.00 10.00 8.00 6.00 4.00 2.00 0.00 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2.04% 1.84% 1.86% 1.85% 1.69% 2.20% 1.75% 1.85% 1.70% 2010 2011 2012 2013 2014 2015 2016 2017 YTD February Source: GDLRC, Credit Libanais Economic Research Unit Source: GDLRC, Credit Libanais Economic Research Unit From a geographical standpoint, the average value per real estate transaction in Beirut increased by 4.26% to $538,494 by February, up from $516,485 at year-end 2017. Similarly, the average value per transaction in the Kesserwan region soared by 86.37% to $255,528 up from $136,965 by the end of the previous year. Conversely, the average value per transaction in each of the Metn and Baabda regions declined by 14.59% and 2.67% respectively to $184,783 and $133,434, down from $216,337 and $137,093 as at end of 2017. Historical Evolution of Average Value per Transaction Across Different Lebanese Regions YTD February 2017 $133,434 $255,258 $184,783 $137,093 $136,965 $216,337 $538,494 $516,485 2016 $146,400 $127,144 $213,312 $520,076 2015 $134,728 $140,169 $205,516 $509,841 2014 $138,644 $139,612 $210,955 $567,233 2013 $120,983 $124,664 $213,584 $499,948 2012 $108,028 $117,596 $182,797 $524,277 2011 $100,712 $97,487 $170,953 $456,136 2010 $103,397 $94,325 $153,064 $369,696 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 Baabda Kesserwan Metn Beirut Source: GDLRC, Credit Libanais Economic Research Unit SOURCE: GDLRC, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 3

BUDGET DEFICIT NARROWS TO $3.38 BILLION BY NOVEMBER 2017 Lebanon s fiscal deficit (Budgetary & Treasury) narrowed to $3.38 billion during the eleven-month period ended November 2017, down from $4.40 billion a year before. The primary balance (Budget & Treasury), however, registered a surplus of just above $1.44 billion, in comparison with a much smaller surplus of $159 million by end of November 2016. In detail, government revenues (Budget & Treasury) rose by 12.52% y-o-y to around $10.26 billion, mainly buoyed by some 17.31% hike in tax revenues to about $7.72 billion, which outweighed the 6.75% contraction in non-tax revenues to $1.84 billion. More specifically, miscellaneous tax revenues soared by 29.46% on a yearly basis to circa $4.22 billion and VATrelated revenues increased by 7.42% to around $2.18 billion. Government expenditures (Budget & Treasury) (including debt service) on the other hand, rose by a shy 0.84% annually to just above $13.63 billion by November 2017. In fact, transfers to Electricité Du Liban (EDL) surged by 40.27% to around $1.15 billion as oil prices sustained their upturn, outweighing the 13.71% drop in budget expenditures over previous years to $0.78 billion and the 37.90% plunge in treasury expenditures to $1.13 billion. Furthermore, debt service continued to weigh heavily on the government s finances and grew by 5.58% y- o-y to $4.82 billion, from $4.56 billion a year earlier. Consequently, the deficit to total expenditures ratio dropped significantly to 24.76% as at end of November 2017, from 32.57% in the same period last year. Public Finance For the Eleven-Month Period Ending Y-O-Y (USD Million) Nov-2016 Nov-2017 % Change Revenues 9,117 10,259 12.52% Expenditures (Including Debt Servicing) 13,521 13,634 0.84% Debt Servicing 4,563 4,817 5.58% Total Deficit (4,404) (3,376) -23.35% Total Primary Surplus/ (Deficit) 159 1,442 809.11% Deficit / Total Expenditures 32.57% 24.76% Source: The Lebanese M inistry of Finance, Credit Libanais Economic Research Unit Cumulative Budget Deficit USD Million 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0-2,000-4,000-6,000 13,521 13,634 10,259 9,117 Nov-2016 Nov-2017 Revenues Expenditures (Including Debt Servicing) Total Deficit Tax Revenues (75.21%) Misc. Tax Revenues (41.16%) Customs Revenues (12.79%) VAT Revenues (21.26%) General Exp. (56.39%) Electricité Du Liban (8.43%) Budget Exp. Prev. Years (5.72%) Other (42.23%) Breakdown of Government Revenues Non-Tax Revenues (17.93%) Breakdown of Government Expenditures Debt Service and Foreign Debt Repayment (35.33%) Interest Payment (33.97%) Foreign Debt Principal Repayment (1.36%) Treasury Receipts (6.86%) Guarantees (0.53%) Municipalities (2.69%) Deposits (0.84%) Other (2.80%) Treasury Exp. (8.28%) Guarantees (0.53%) Municipalities (2.73%) Deposits (1.36%) Other (3.65%) SOURCE: MOF, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 4

COMMERCIAL BANKS ASSETS NEAR $223 BILLION AT END OF JANUARY The combined balance sheet of commercial banks operating in Lebanon widened by 1.24% (LBP 4,115 billion) during the first month of to LBP 335,548 billion ($222.59 billion), up from LBP 331,433 billion ($219.86 billion) at end of year 2017. On an annual basis, the combined assets of the banking sector came in 8.91% higher than the LBP 308,104 billion ($204.38 billion) reading reported at end of January 2017. The sector remains highly liquid, enjoying a primary liquidity ratio of 86.20%, compared to 81.85% a year before. USD Billion 2013 2014 2015 2016 Jan-2017 2017 Jan- Total Assets 164.82 175.70 185.99 204.31 204.38 219.86 222.59 Loans to the Private Sector 47.38 50.90 54.52 57.18 56.95 60.32 59.61 Customer Deposits, o/w: 139.17 147.64 154.95 166.45 166.52 172.97 173.56 - Resident Private Sector Deposits 107.73 114.12 119.73 128.53 128.76 133.51 133.77 - Non-Resident Private Sector Deposits 28.48 30.30 31.86 33.96 33.97 35.16 35.37 - Public Sector Deposits 2.96 3.21 3.37 3.95 3.79 4.30 4.42 Capital Accounts 12.64 14.20 15.73 16.67 18.26 19.13 19.05 Dollarization Rate 64.82% 66.14% 65.71% 64.88% 65.84% 68.72% 68.44% Private Sector Loans/Deposits Ratio 34.05% 34.48% 35.19% 34.35% 34.20% 34.87% 34.35% - LBP Private Sector Loans/LBP Deposits 20.84% 22.65% 23.58% 24.11% 26.56% 30.71% 30.41% - FC Private Sector Loans/FC Deposits 41.63% 40.26% 40.53% 41.55% 38.43% 36.92% 36.32% Source: The Association of Banks in Lebanon, Credit Libanais Economic Research Unit USD Billion Evolution of Commercial Banks' Consolidated Assets 250.00 200.00 204.31 204.38 185.99 175.70 164.82 219.86 222.59 150.00 100.00 2013 2014 2015 2016 Jan- 2017 2017 Jan- Source: ABL, Credit Libanais Economic Research Unit On the funding side of the balance sheet, customer deposits (private and public sector) rose by 0.34% (LBP 894 billion) during the month of January to LBP 261,639 billion ($173.56 billion), up from LBP 260,745 billion ($172.97 billion) at year-end 2017. Said rise came as a result of the 0.20% (LBP 394 billion) increase in deposits from the resident private sector to LBP 201,657 billion ($133.77 billion), accompanied by a 0.61% (LBP 323 billion) expansion in deposits from the non-resident private sector to LBP 53,321 billion ($35.37 billion). From a currency denomination standpoint, deposits in Lebanese Pounds grew by 1.29% (LBP 1,113 billion) during the first month of the current year to LBP 87,137 billion ($57.80 billion), while foreign currency deposits fell by 0.13% (LBP 220 billion) to LBP 174,502 billion ($115.76 billion). This owes to the higher yields on local currency deposits and the restored confidence in the economy. In this context, the deposit dollarization rate dropped to 68.44% in the concerned month from 68.72% in December 2017 and 65.84% in January 2017. On an annual basis, customer deposits appreciated by 4.22% from LBP 251,033 billion ($166.52 billion) in January of last year. On the lending front, loans to the private sector (residents and non-residents) decreased by 1.17% (LBP 1,063 billion) in January to LBP 89,869 billion ($59.61 billion), down from LBP 90,930 billion ($60.32 billion) in December 2017. The loans portfolio widened, however, by 4.68% annually, resulting in a ratio of net loans to customer deposits of 34.35%, compared to 34.87% in December and 34.20% in January of the previous year. More specifically, the ratio of LBP-denominated private sector loans to LBP deposits fell to 30.41% in January from 30.71% at year-end 2017 yet remained higher than the 26.56% level reported in the first month of 2017. Futhermore, the ratio of foreign currency-denominated private sector loans to foreign currency deposits dropped to 36.32%, down from 36.92% and 38.43% in December and January 2017 respectively. The consolidated capital accounts of commercial banks operating in Lebanon reached LBP 28,724 billion ($19.05 billion) at end of January, compared to LBP 28,831 billion ($19.13 billion) at end of 2017 and LBP 27,521 billion ($18.26 billion) in January 2017. This can be explained by banks continuous reinforcement of their capital base in order to meet BDL s solvency requirements. SOURCE: ABL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 5

GROSS PUBLIC DEBT AT $80.39 BILLION IN JANUARY Lebanon s gross public debt soared by $851.74 million during the first month of to $80.39 billion, up from $79.53 billion in December. On an annual basis, gross public debt widened by $4.20 billion when compared to the $76.18 billion reading recorded in January of last year. The share of the Lebanese banking sector of gross public debt fell to 38.60% this January, down from 40.17% in December. As far as debt in local currency is concerned, the latter rose by 1.39% month-on-month and by 3.83% year-on-year to $49.82 billion. In parallel, debt in foreign currency expanded by 0.56% on a monthly basis and by 8.38% on a yearly basis to $30.57 billion. The share of debt in local currency increased to 61.98% of gross public debt in January (from 61.78% in December), while that in foreign currency narrowed to 38.02% (from 38.22% in December). Net public debt, which factors out public sector deposits, came in 6.50% higher on a yearly basis at $69.59 billion in January of the current year, noting that public sector deposits shed 0.42% to $10.80 billion. Public Debt (USD Billion) Jan-2017 Jan- Y-O-Y % Change Gross Public Debt 76.18 80.39 5.52% Debt in LBP 47.98 49.82 3.83% Debt in Foreign Currency 28.20 30.57 8.38% Public Sector Deposits 10.84 10.80-0.42% Net Public Debt 65.34 69.59 6.50% Source: The Association of Banks in Lebanon, Credit Libanais Economic Research Unit Composition of Gross Public Debt in January Debt in Foreign Currency 38.02% Debt in LBP 61.98% Source: ABL, Credit Libanais Economic Research Unit The compounded annual growth rate in Lebanon s net public debt stood at 6.44% over the January 2011 January period as captured by the chart below: Evolution of Net Public Debt Billions of USD 69.59 70.00 60.00 50.00 44.97 46.56 49.54 53.47 57.46 61.76 65.34 40.00 30.00 20.00 10.00 0.00 Jan-2011 Jan-2012 Jan-2013 Jan-2014 Jan-2015 Jan-2016 Jan-2017 Jan- Source: ABL, Credit Libanais Economic Research Unit SOURCE: ABL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 6

CLEARED CHECKS VOLUME AT 1.93 MILLION BY FEBRUARY According to ABL statistics, the value of cleared checks rose to LBP 16,713 billion (distributed over 1,925,164 checks) by February, in comparison with LBP 16,475 billion (allocated over 1,910,180 checks) in the same period last year. Of the total value of cleared checks, 67.05% was denominated in foreign currency, versus 61.93% a year before. Similarly, the value of returned checks widened by LBP 53 billion (17.55%) on an annual basis to LBP 355 billion during the first two months of the current year, with the number of returned checks rallying by 18.73% y-o-y to 41,287. This is further illustrated in the section below: Cumulative Check Clearing Activity February 2017 February Y-O-Y % Change Billion Number Billion Number Value Volume Cleared Checks-LBP Denominated LBP 5,137 682,390 LBP 5,507 732,991 7.20% 7.42% Returned Checks-LBP Denominated LBP 62 11,000 LBP 87 14,031 40.32% 27.55% Cleared Checks-Foreign Currency Denominated $7.52 1,227,790 $7.43 1,192,173-1.18% -2.90% Returned Checks-Foreign Currency Denominated $0.16 23,773 $0.18 27,256 11.95% 14.65% Total Cleared Checks LBP 16,475 1,910,180 LBP 16,713 1,925,164 1.44% 0.78% Total Returned Checks LBP 302 34,773 LBP 355 41,287 17.55% 18.73% Source: Association of Banks in Lebanon, Credit Libanais Economic Research Unit Breakdown of Clearing Activity by Value Breakdown of Clearing Activity by Volume Foreign Currency- Denominated, 67.05% LBP- Denominated, 32.95% Foreign Currency- Denominated 61.93% LBP- Denominated 38.07% Source: ABL, Credit Libanais Economic Research Unit Source: ABL, Credit Libanais Economic Research Unit The number of returned checks expressed as a percentage of the total number of cleared checks rose to 2.14% by February, up from 1.82% a year before. Concurrently, the value of returned checks calculated as a percentage of the total cleared checks value increased to 2.12%, up from 1.83% in the same period last year. Returned Checks as a Percentage of Cleared Checks (Value) Returned Checks as a Percentage of Cleared Checks (Number) 3.00% 2.50% 2.00% 1.50% 2.12% 1.83% 1.58% 1.21% 2.40% 2.11% 2.50% 2.00% 1.50% 1.00% 2.14% 1.82% 1.91% 1.61% 1.94% 2.29% 1.00% 0.50% 0.50% 0.00% Total LBP FC 0.00% Total LBP FC YTD February 2017 YTD February YTD February 2017 YTD February Source: ABL, Credit Libanais Economic Research Unit Source: ABL, Credit Libanais Economic Research Unit SOURCE: ABL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 7

NUMBER OF PAYMENT CARDS REACHES 2.63 MILLION AT END OF 2017 The number of payment cards in Lebanon (debit, credit, charge, and prepaid cards) fell by 4.71% (130,253 cards) in the year 2017 to 2,633,459 cards, down from 2,763,712 cards in 2016. In detail, the number of debit cards plunged by 129,894 on an annual basis to 1,537,633, accompanied by a 53,281 contraction in the number of charge cards to 98,811, which together outweighed the 16,672 hike in the number of credit cards to 571,366 and the 36,250 increase in the number of prepaid cards to 425,649. 2010 2011 2012 2013 2014 2015 2016 2017 CAGR (%) Number of Payment Cards 1,676,372 1,783,962 1,861,849 2,183,995 2,432,598 2,754,657 2,763,712 2,633,459 6.67% Number of ATMs 1,285 1,326 1,433 1,516 1,603 1,707 1,793 1,902 5.76% Number of Electronic POS 19,708 21,471 23,833 23,820 25,781 27,120 30,181 33,951 8.08% Source: BDL, Credit Libanais Economic Research Unit In 000 Evolution of the Number of Payment Cards 3,000 2,500 2,184 2,433 2,755 2,764 2,633 2,000 1,676 1,784 1,862 1,500 1,000 500 2010 2011 2012 2013 2014 2015 2016 2017 Source: BDL, Credit Libanais Economic Research Unit In a related note, the banking sector s ATM network sustained its expansionary momentum, spreading over 1,902 machines by end of 2017, up from 1,880 machines a quarter earlier and 1,793 machines at end of year 2016. The Beirut & suburbs region continued to amass the highest concentration of ATMs (744 ATMs <39.12%>), followed by the Mount Lebanon (651 ATMs <34.23%>), North (194 ATMs <10.20%>), South (151 ATMs <7.94%>), Bekaa (130 ATMs <6.83%>), and Nabatieh (32 ATMs <1.68%>) regions. Geographical Distribution of ATMs as at End of 2017 Evolution of the Number of ATMs South Lebanon 7.94% North Lebanon 10.20% Nabatieh 1.68% Bekaa 6.83% Beirut and Suburbs 39.12% 2,000 1,800 1,600 1,433 1,516 1,603 1,707 1,793 1,902 1,400 1,285 1,326 1,200 Mount Lebanon 34.23% 1,000 2010 2011 2012 2013 2014 2015 2016 2017 Source: BDL, Credit Libanais Economic Research Unit Source: BDL, Credit Libanais Economic Research Unit SOURCE: BDL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 8

CEMENT DELIVERIES DOWN BY 10.61% Y-O-Y IN JANUARY Cement deliveries, the coincident indicator of construction activity, plunged by 35.56% during the month of January to 274,856 tons, down from 426,543 tons in December 2017. Similarly, and on an annual basis, cement deliveries also fell by 10.61% when compared to the 307,491 tons reported in January of last year. Evolution of Cement Deliveries (Tons) Yearly Evolution of Cement Deliveries Jan-11 341,792 Jan-12 262,981 Jan-13 333,559 Jan-14 429,939 Tons 1,000,000 341,792 262,981 333,559 429,939 263,179 250,724 307,491 274,856 Jan-15 263,179 Jan-16 250,724 Jan-17 307,491 0 Jan-18 274,856 Source: BDL, Credit Libanais Economic Research Unit Source: BDL, Credit Libanais Economic Research Unit Cement deliveries registered a negative compounded annual growth rate (CAGR) of 3.07% over the January 2011 January period, mirroring the lackluster activity of Lebanon s construction sector amidst the pale economic situation. THE COINCIDENT INDICATOR UP BY 4.10% Y-O-Y IN JANUARY Banque Du Liban s coincident indicator fell by 2.64% during the first month of to 309.4, down from 317.8 in December, yet registered a 4.10% annual increase from 297.2 in January 2017. It is worth noting that the coincident indicator is a gauge used to measure Lebanon s macroeconomic activity and comprises the import of petroleum derivatives, electricity production, check clearing activity, cement deliveries, foreign passengers, foreign trade, and the M3 monetary aggregate. Evolution of Lebanon's Coincident Indicator 330 320 310 305.3 306.2 317.6 308.6 304.0 302.0 323.9 317.8 309.4 306.0 300 290 297.2 290.1 291.2 280 270 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Source: BDL, Credit Libanais Economic Research Unit SOURCE: BDL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 9

RESERVES AT BDL REACH $55.61 BILLION AS AT MID-MARCH The Lebanese Central Bank s balance sheet revealed some $52.14 million expansion in the foreign assets (foreign currency reserves) portfolio during the first half of March to $43.41 billion, from $43.36 billion as at end of February. Concurrently, the value of gold reserves at BDL widened by $26.01 million during the first half of March to $12.20 billion, as a result of the increase in gold prices amidst the threat of a global trade war following President Trump s decision to place tariffs on imports of aluminum and steel. On an annual basis, foreign assets at BDL came in 5.86% ($2.40 billion) higher than the $41.01 billion reading reported at 2017. Similarly, the value of gold reserves rose by circa 10.04% ($1.11 billion) year-on-year when benchmarked to the $11.08 billion figure recorded in the same period last year. Overall, total reserves (foreign currency and gold) at BDL rose by $3.51 billion annually to $55.61 billion up from $52.09 billion a year before. These reserves cover around 127 months of debt service and constitute around 69.17% and 79.91% of Lebanon s gross and net public debt on a respective basis. $ Billion 2012 2013 2014 2015 2016 2017 Gold 15.21 14.69 12.64 10.66 11.38 11.08 12.20 Foreign Assets 32.28 35.31 36.38 38.32 36.69 41.01 43.41 Total Reserves 47.49 50.00 49.02 48.98 48.07 52.09 55.61 Source: Banque Du Liban, Credit Libanais Economic Research Unit Total Reserves Evolution of Total Reserves at Banque Du Liban As a % of Gross Public Debt (1) 69.17% As a % of Net Public Debt (1) 79.91% In Months of Debt Service (2) 126.97 USD Billion 45.00 40.00 35.00 30.00 32.28 35.31 36.38 38.32 36.69 41.01 43.41 (1) As at End of January (2) Average Monthly Debt Service as at End of November 2017 25.00 20.00 15.00 15.21 14.69 12.64 10.66 11.38 11.08 12.20 Source: MOF, ABL, Credit Libanais Economic Research Unit 10.00 5.00 0.00 2012 2013 2014 2015 2016 2017 Gold Foreign Assets Source: Banque Du Liban, Credit Libanais Economic Research Unit In a related note, BDL s balance sheet contracted by some $1 billion during the first half of March to $121.28 billion. This comes as a result of the 7.25% contraction in other assets to $18.17 billion which outweighed the 0.78% hike in the value of the securities portfolio to $32.15 billion, the 0.61% rise in loans to the local financial sector to $15.11 billion and the 0.14% increase in the value of total reserves to $55.61 billion. $ Billion 2017 End of February Bi-Weekly (% Change) Y-O-Y (% Change) Total Reserves 52.09 55.53 55.61 0.14% 6.75% Securities Portfolio 24.51 31.90 32.15 0.78% 31.15% Loans to Public Sector 0.00 0.00 0.00 0.00% 0.00% Loans to Local Financial Sector 6.03 15.02 15.11 0.61% 150.36% Valuation Adjustment 0.00 0.00 0.00 0.00% 0.00% Other Assets 19.89 19.59 18.17-7.25% -8.65% Fixed Assets 0.22 0.24 0.24 0.07% 7.73% Total Assets 102.76 122.28 121.28-0.82% 18.02% Currency in Circulation Outside BDL 3.31 3.59 3.60 0.35% 8.77% Financial Sector Deposits 83.38 100.18 99.30-0.88% 19.09% Public Sector Deposits 5.95 6.94 6.72-3.18% 13.06% Valuation Adjustment 5.52 6.64 6.69 0.63% 21.14% Other Liabilities 1.04 1.26 1.34 6.68% 28.15% Capital Accounts 3.56 3.68 3.64-1.09% 2.08% Total Liabilities 102.76 122.28 121.28-0.82% 18.02% Source: Banque Du Liban, Credit Libanais Economic Research Unit Loans to Local Financial Sector 12.46% Loans to Public Sector 0.00% Breakdown of BDL's Balance Sheet as at Valuation Adjustment Other Assets 0.00% Fixed Assets 14.98% 0.20% Securities Portfolio 26.51% Source: BDL, Credit Libanais Economic Research Unit Total Reserves 45.85% The share of gold & foreign currency reserves at BDL, however, widened to 45.85% of the latter s total assets by, up from 45.41% at end of February, yet continued to linger behind the 50.69% level reported at of the previous year. SOURCE: BDL, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 10

NEW CAR SALES SETTLE 4.78% LOWER Y-O-Y BY FEBRUARY According to the monthly statistics published by the Automobile Importers Association (AIA), new car sales in Lebanon fell by 9.40% month-on-month to 2,255 vehicles in February, compared to 2,489 vehicles in January and 2,562 vehicles in February 2017. On a cumulative basis, new car sales shed 4.78% y-o-y to 4,744 in the first two months of the current year, down from 4,982 cars during that same period last year. This comes as a result of the sharp 14.23% annual contraction in the sales of Korean cars to 1,416 vehicles, coupled with some 5.42% drop in the sales of European cars to 1,048 vehicles and a 25.13% slump in the sales of American cars to 298 vehicles, which altogether outweighed the 4.76% y-o-y increase in the sales of Japanese cars to 1,848 vehicles and the 119.67% hike in the sales of Chinese cars to 134 vehicles. In a related note, the number of imported cars via the Beirut Port plunged by about 30% on an annual basis during the first two months of. Japanese cars controlled the lion s share of new car sales in Lebanon, amassing alone 38.95% of total volume sales by February, followed by Korean (29.85%), European (22.09%), American (6.28%), and Chinese (2.82%) cars. New Car Sales During the Two-Month Period Ending Feb-2017 Feb- % Change Japanese 1,764 1,848 4.76% European 1,108 1,048-5.42% Korean 1,651 1,416-14.23% American 398 298-25.13% Chinese 61 134 119.67% Total 4,982 4,744-4.78% Source: AIA, Credit Libanais Economic Research Unit Breakdown of New Car Sales YTD February Korean, 29.85% American, 6.28% Chinese, 2.82% Japanese, 38.95% European, 22.09% The Korean KIA brand recorded total unit sales of 852 cars by February of the current year, enjoying the highest market share of 17.96%, followed by the Japanese Toyota (623 cars <13.13%>) and Korean Hyundai (559 cars <11.78%>) brands, only to name a few. Top 10 New Car Sales Brands YTD February Mazda Mitsubishi 121 124 Mercedes Chevrolet Renault Suzuki 160 169 192 215 Nissan 480 Hyundai 559 Toyota 623 KIA 852-100 200 300 400 500 600 700 800 900 Source: AIA, Credit Libanais Economic Research Unit SOURCE: AIA, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 11

BEIRUT PORT ACTIVITY UP 1.47% Y-O-Y BY FEBRUARY Beirut Port freight activity improved to around 721.5 thousand tons in February, up from 639.0 thousand tons in January. Similarly, on a cumulative basis, freight activity inched upwards by 1.47% y-o-y to 1,361 thousand tons by February, from 1,341 thousand tons in the same period last year. Concurrently, the number of vessels increased by 6.87% annually to 311 by end of February, up from 291 vessels a year before, with the number of containers rallying by 12.43% to nearly 213 thousand. Nonetheless, the number of imported cars via the Beirut Port plunged by 5,328 cars (29.59%) annually to 12,677, from 18,005 cars in the first two months of 2017. Overall, Port revenues grew by a solid 10.29% y-o-y to $39.85 million by February, up from $36.13 million in the equivalent period last year. Port of Beirut For the Two-Month Period Ending Indicators Feb-2017 Feb- % Change Freight Activity (000 Tons) 1,341 1,361 1.47% Number of Vessels 291 311 6.87% Number of Imported Cars 18,005 12,677-29.59% Number of Containers 189,059 212,561 12.43% Revenues ($ Million) 36.13 39.85 10.29% Source: Beirut Port, Credit Libanais Economic Research Unit Evolution of Freight Activity in the Beirut Port Thousand Tons 1,600 1,400 1,200 1,394 1,137 1,335 1,341 1,361 1,000 800 600 400 200 0 Feb-2014 Feb-2015 Feb-2016 Feb-2017 Feb- Source: Beirut Port, Credit Libanais Economic Research Unit SOURCE: BEIRUT PORT, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 12

CORPORATE NEWS MOODY S RELEASES CREDIT OPINION ON BANK AUDI Moody s Investors Service, the international rating agency, published this week a Credit Opinion on Bank Audi S.A.L. in which it reaffirmed its rationale behind the bank s rating and outlook and unveiled the factors that could lead to an upgrade or downgrade of said rating. In detail, the agency affirmed its B3 long-term deposit rating for the bank with a Stable outlook and maintained the bank s b3 baseline credit assessment and A3.lb/LB-2 national scale ratings (NSRs). Moody s Investors Service stated that these ratings reflect the limited impact of a lower Macro Profile for Turkey, where the bank s majorityowned subsidiary Odea Bank A.S. (Ba3 stable, ba3) operates, on its financial profile. Moreover, the agency highlighted the bank s leading local market positioning where it emerged as the largest bank in Lebanon (market share of 11.1% as at end of 2016), and its foreign geographical diversification whereby 38% of its assets are located abroad (as at end of 2017). The agency noted that the bank s Turkish subsidiary detained about 20% of the group s assets by year-end 2017, whereas its operations in the MENA region, the majority of which is concentrated in Egypt, controlled some 11% of consolidated assets. Moody s also praised Bank Audi s robust deposit base, ample liquidity level, and stable funding structure, commenting that customer deposits funded about 79% of the bank s total assets, while liquid assets constituted 34% of total assets at end of September 2017. The agency further revealed that Bank Audi has accumulated collective provisions in 2016, which constitute a buffer against potential credit losses. Nevertheless, the agency spotted the light on the bank s strained operating environment and high exposure to sovereign debt, with its total exposure (i.e. direct and indirect) to government risk soaring from 3.8x its Tier 1 capital in 2015 to 4.8x in 2016. In parallel, Moody s considered Bank Audi s capitalization ratios as modest despite their gradual progress, with shareholders equity (excluding minority interest) constituting 9.0% of total assets as at December 2017, compared to 7.8% in 2016. Concurrently, and according to the agency, Bank Audi s Tier 1 capital adequacy ratio under Basel III increased from 11.6% in 2016 to 13.6% in 2017, exceeding the minimum threshold of 13.0% that should be applicable starting end of year. In this context, Moody s listed among the factors that may trigger a rating downgrade for the bank a deterioration in Lebanon s sovereign creditworthiness or the local operating environment, especially if followed by capital outflows or a hampered asset quality. Among the factors that may result in a rating upgrade, the agency mentioned a substantially reduced exposure to sovereign debt and/or a progress in the country s sovereign credit risk profile, in addition to an improvement in the concerned operating environment. EBRD ACQUIRES A STAKE IN BANK AUDI According to a press release circulated by the BSE on March 16,, the European Bank for Reconstruction and Development (EBRD) acquired a 2.51% stake in Bank Audi by purchasing common shares on the Beirut Stock Exchange. This investment highlights EBRD s intent to support the Lebanese financial markets, act as a catalyst to improve the Lebanese economy and potentially play an important role in strengthening the Lebanese financial sector. In addition, this transaction constitutes the first-ever EBRD investment in Lebanon and also the first equity investment in a banking institution in the Southern and Eastern Mediterranean (SEMED) region where the EBRD has invested so far some 6.5 billion over 170 projects, always according to the press release. Finally, the president of the EBRD lauded the Lebanese financial sector as the backbone of the country s economic stability and international reputation. It is worth noting that the EBRD (owned by 68 shareholders including the EU and the EIB) seeks to develop marketoriented economies and to promote private and entrepreneurial initiative in more than 38 economies. SOURCE: MOODY S INVESTORS SERVICE, BSE, BANK AUDI, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 13

MONETARY PERFORMANCE MONETARY AGGREGATES All monetary aggregates ended the week of March 01, on a positive note. In fact, the overall money supply, M4, rose by LBP 643.08 billion on a weekly basis and by 3.34% on an annual basis to LBP 219,803 billion, noting that the non-banking sector s Treasury bills portfolio increased by LBP 5 billion during the concerned week. Similarly, Lebanese-Pound denominated deposits and currency in circulation, M1, widened by LBP 652.57 billion week-on-week to LBP 10,434 billion on the back of some LBP 210 billion expansion in money in circulation coupled with a LBP 443 billion growth in demand deposits. On a yearly basis as well, M1 improved by 5.89%. Local currency term deposits, M2, also appreciated by LBP 748.07 billion on a weekly basis, yet plunged by 2.92% year-on-year to settle at LBP 80,417 billion. Consequently, private sector term and saving deposits denominated in LBP ( M2-M1 ) added LBP 95.49 billion (0.14%) during the week ended March 01 to LBP 69,983 billion, while deposits denominated in foreign currencies ( M3-M2 ) edged LBP 110.39 billion (0.09%) lower to LBP 128,560 billion. Money Supply LBP Billion February 22, March 01, % Change M1 9,781 10,434 6.67% M2 79,669 80,417 0.94% M3 208,339 208,977 0.31% M4 219,160 219,803 0.29% M2-M1 69,888 69,983 0.14% M3-M2 128,670 128,560-0.09% Source: Banque Du Liban, Credit Libanais Economic Research Unit 250,000 200,000 150,000 Money Supply - LBP Billion - 219,160 219,803 208,339 208,977 February 22, March 01, M4 M3 Source: BDL, Credit Libanais Economic Research Unit MONEY MARKETS The March 8 th Treasury bill auction raised LBP 556.881 billion ($369.407 million), compared to LBP 804.588 billion ($533.723 million) in the auction of the previous week. The majority of subscriptions (62.89%) was concentrated in the five-year to maturity T-bonds, followed by the one-year (18.95%) and three-month (18.16%) tenure Treasury securities. Consequently, the weighted average yield on Lebanese Pound Treasury bills stood at 6.06% in the auction of March 8. The yields on the three-month, one-year, and five-year to maturity Treasury securities remained flat at 4.44%, 5.35%, and 6.74% respectively. March 8, Lebanese Treasury Bills Yield (%) Face Value (in billions of LBP) % of Total Face Value 3 Months 4.44% 101.105 18.16% 12 Months 5.35% 105.526 18.95% 60 Months 6.74% 350.250 62.89% Total 556.881 100.00% 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% 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 14

LEBANESE EQUITIES LEBANESE EQUITIES Activity on the Beirut Stock Exchange witnessed a sizeable rebound this week amid three exceptionally large block trades on Bank Audi listed shares involving together over 30 million stocks. It is worth noting that part of these block trades pertains to the acquisition of the European Bank for Reconstruction & Development of a 2.51% stake in Bank Audi by purchasing common shares on the BSE. Consequently, the total number of shares changing hands skyrocketed to 30,564,295 shares this week, compared to 1,083,523 shares a week earlier, with traded value rallying to nearly $199.01 million, from around $6.97 million a week before. Trades were mainly concentrated in banking stocks, which accounted for 99.54% of weekly traded volume. The average daily trading volume soared to 6,112,859 shares this week, from 216,705 shares last week. Concurrently, the average daily trading value widened to just over $39.80 million, from $1.39 million a week earlier. Credit Libanais Week of Week of Weekly YTD Indices 9-Mar-18 16-Mar-18 % Change % Change Credit Libanais Aggregate Stock Index <.CLASI> Credit Libanais Financial Sector Stock Index <.CLFI> Credit Libanais Construction Sector Stock Index <.CLCI> Index Value 1,250 1,200 1,150 1,100 1,110.82 1,116.93 0.55% 2.63% 1,518.30 1,531.75 0.89% 2.73% 474.39 469.31-1.07% 2.16% Credit Libanais Aggregate Stock Index Weekly Performance CLASI Six gainers and three losers were spotted this week, lifting the BSE s market capitalization up by 0.46% week-on-week to about $11.71 billion and the Credit Libanais Aggregate Stock Index ( CLASI ) higher by 0.55% to 1,116.93. In the real estate sector, trades mainly consisted of Solidere A and B shares (0.46% of total traded volume), with the price of Solidere A dropping by 1.58% to $8.08 and that of Solidere B shedding 1.60% to $7.99. In this context, the Credit Libanais Construction Sector Stock Index ( CLCI ) ended the week 1.07% lower at 469.31. In the banking sector, Bank Audi listed shares amassed the highest concentration of trades (98.85% of total traded volume) on a turnover ratio of 7.56%. The Credit Libanais Financial Sector Stock Index ( CLFI ) rose by 0.89% on a weekly basis to 1,531.75. This comes as a result of the 1.83% increase in the price of Bank Audi listed shares to $6.11, accompanied by some 1.27% hike in the price of BLOM Bank listed shares to $12.00 and some 0.08% appreciation in the price of BLOM Bank GDRs to $12.40, which altogether outweighed the 0.62% contraction in the price of Byblos Bank listed shares to $1.60. 1,050 1,000 CLASI 0.55% 16-Mar-17 07-May-17 28-Jun-17 19-Aug-17 10-Oct-17 01-Dec-17 22-Jan-18 15-Mar-18.CLASI Credit Libanais Aggregate Stock Index Friday, March 16, Value Daily % Chng Daily Net Chng 1,116.93 0.250% 2.78 Yr.High Year Hi.Date Yr.Low Year.Lo.Date 1,130.99 30-Jan-18 1,088.33 2-Jan-18 Life High Life Hi.Date Life Low Life.Lo.Date 1,801.01 7-Jul-08 836.11 25-Mar-09 Credit Libanais Financial Sector Stock Index Weekly Performance CLFI Credit Libanais Construction Sector Stock Index Weekly Performance CLCI Index Value 1,700 1,650 1,600 1,550 1,500 1,450 1,400 1,350 1,300 16-Mar-17 07-May-17 28-Jun-17 CLFI 0.89% 19-Aug-17 10-Oct-17 01-Dec-17 22-Jan-18 15-Mar-18 Index Value 700 650 600 550 500 450 400 350 300 250 200 16-Mar-17 07-May-17 28-Jun-17 CLCI 1.07% 19-Aug-17 10-Oct-17 01-Dec-17 22-Jan-18 15-Mar-18 SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 15

LEBANESE EQUITIES BEIRUT STOCK EXCHANGE Closing Weekly %Change Weekly Volume Traded Lebanese Equities % of Weekly Weekly Volume Traded Value Traded Market Capitalisation ($000) Solidere A $8.08-1.58% 112,074 0.37% $910,211 0.46% 100,000,000 808,000 17.57 0.66 0.87% Solidere B $7.99-1.60% 29,683 0.10% $239,995 0.12% 65,000,000 519,350 17.37 0.65 0.13% BLC Bank $0.93 0.00% - - - - 71,033,333 66,061 5.17 0.51 0.00% BLC Bank Preferred Class "B" $100.00 0.00% - - - - 550,000 55,000 n.a n.a 0.00% BLC Bank Preferred Class "C" $100.00 0.00% - - - - 350,000 35,000 n.a n.a 0.00% BLC Bank Preferred Class "D" $100.00 0.00% 800 0.00% $80,000 0.04% 750,000 75,000 n.a n.a 0.00% Bank Audi - Listed Shares $6.11 1.83% 30,211,406 98.85% $194,642,345 97.81% 399,749,204 2,442,468 4.81 0.77 6.26% Bank Audi GDR $5.80 0.00% - - - - 119,924,761 695,564 4.57 0.73-0.68% Bank Audi Preferred "G" $100.30 0.00% - - - - 1,500,000 150,450 n.a n.a 0.00% Bank Audi Preferred "H" $100.00 0.00% 1,000 0.00% $100,000 0.05% 750,000 75,000 n.a n.a -0.60% Bank Audi Preferred "I" $100.10 0.10% 9,930 0.03% $993,993 0.50% 2,500,000 250,250 n.a n.a 0.15% Bank Audi Preferred "J" $100.00 0.00% - - - - 2,750,000 275,000 n.a n.a 0.05% Bank Of Beirut - Listed Shares $18.80 0.00% - - - - 17,746,417 333,633 8.83 1.06 0.00% Bank Of Beirut Priority Shares 2014 $21.00 0.00% - - - - 4,762,000 100,002 9.86 1.18 0.00% Bank Of Beirut Preferred "H" $26.00 0.00% - - - - 5,400,000 140,400 n.a n.a 0.39% Bank Of Beirut Preferred "I" $26.00 0.00% 6,160 0.02% $159,640 0.08% 5,000,000 130,000 n.a n.a 1.96% Bank Of Beirut Preferred "J" $26.00 0.00% - - - - 3,000,000 78,000 n.a n.a 1.36% Bank Of Beirut Preferred "K" $25.75 0.00% - - - - 4,000,000 103,000 n.a n.a 1.58% Byblos Bank - Listed Shares $1.60-0.62% 50,100 0.16% $80,179 0.04% 565,515,040 904,824 6.67 0.62 0.00% Byblos Bank Preferred Class 2008 $102.10 0.00% - - - - 2,000,000 204,200 n.a n.a 0.49% Byblos Bank Preferred Class 2009 $102.50 0.00% 539 0.00% $55,248 0.03% 2,000,000 205,000 n.a n.a 1.49% Byblos Bank GDR $80.50 0.00% - - - - 1,309,078 105,381 6.71 0.63 3.60% BEMO Bank - Listed Shares $1.50 0.00% - - - - 51,400,000 77,100 5.77 0.67 15.38% BEMO Bank Preferred Class 2013 $104.60 0.58% 500 0.00% $52,300 0.03% 350,000 36,610 n.a n.a 1.26% BLOM Bank GDR $12.40 0.08% 9,500 0.03% $117,765 0.06% 73,896,010 916,311 5.69 0.90-2.36% BLOM Bank Listed Shares $12.00 1.27% 132,320 0.43% $1,570,063 0.79% 215,000,000 2,580,000 5.50 0.87 3.09% RYMCO Class "B" $3.30 0.00% - - - - 10,920,000 36,036 15.00 1.69 1.54% Holcim Liban $14.75 1.30% 283 0.00% $4,174 0.00% 19,516,040 287,862 7.56 1.43 2.01% Ciment Blancs Nominal $2.61 0.00% - - - - 9,000,000 23,490 6.87 1.14 16.00% Note: n.a stands for not applicable Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit Activity Analysis Previous Last % Change Value Traded ($) 6,966,383 199,005,912 2756.66% Volume Traded 1,083,523 30,564,295 2720.83% Average Daily Trading Value ($) 1,393,277 39,801,182 2756.66% Average Daily Trading Volume 216,705 6,112,859 2720.83% Market Cap - BSE ($) 11,654,965,577 11,708,989,847 0.46% Weighted Average P/E 7.304 7.264-0.54% Weighted Average P/BV 0.804 0.810 0.70% Source: Beirut Stock Exchange, Credit Libanais Economic Research Unit 8 6 4 2 % of Weekly Value Traded Total Listed Shares P/E P/BV YTD Price Perf. Evolution of Beirut Bourse Comparable Benchmarks 7.304 7.264 0.804 0.810 0 Mar 9, Mar 16, P/E P/BV Source: BSE, Credit Libanais Economic Research Unit The market-cap weighted average price to earnings (P/E) multiple of listed stocks ended its week lower at 7.264x, while the price to book value (P/BV) metric rose to 0.810x based on the closing prices of Friday s session. SOURCE: BSE, CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 16

LEBANON S MAIN INDICATORS Recap of Lebanon's Major Indicators 2 0 11 2 0 12 2 0 13 2 0 14 2 0 15 2 0 16 2 0 17 2 0 18 MACROECONOMIC INDICATORS GDP (Current Prices) ($ Billion) 40.08 43.87 46.01 47.83* 49.46* 50.46* 52.70* 55.02* Real GDP Growth Rate 0.92% 2.80% 2.64% 2.00%* 0.82%* 1.00%* 1.50%* 2.00%* GDP per Capita (Current Prices) ($) 9,144 9,914 10,399* 10,810* 11,178* 11,295* 11,684* 12,082* Foreign Direct Investment Inflows ($ Billion) 3.14 3.11 2.66 2.91 2.35 2.56 FDI/GDP Ratio 7.84% 7.09% 5.78% 5.84% 4.71% 5.13% INDUSTRY Industrial Exports ($ Million) 3,530 3,567 3,384 3,150 2,956 2,527 2,254 (2) Import of Industrial Machinery ($ Million) 239 288 300 269 234 236 234 (2) TOURISM Total Number of Tourists 1,655,051 1,365,845 1,274,362 1,354,647 1,517,927 1,688,357 1,856,795 Growth in Tax-Free Spending 10% -6% 4% 8% 2% -9% 5% REAL ESTATE Value of Real Estate Transactions ($ Million) 8,841 9,175 8,708 8,952 8,006 8,482 9,954 1,316 (4) Number of Real Estate Sales Transactions 82,984 74,569 69,198 70,721 63,386 64,248 73,541 9,819 (4) Construction Permits (000 sqm) 13,890 12,362 10,527 11,159 10,294 9,935 9,271 649 (3) Cement Delivery (000 tons) 5,550 5,309 5,831 5,517 5,043 5,265 5,149 275 (3) TRANSPORTATION Beirut Port: Freight Activity (000 Tons) 6,677 7,225 8,268 8,281 7,240 8,737 8,629 1,361 (4) Beirut Airport: Number of Passengers (million) 5.65 5.96 6.26 6.57 8.22 7.61 8.24 0.60 (3) FOREIGN TRADE Imports ($ Million) 20,158 21,280 21,228 20,494 18,069 18,705 23,130 1,705 (3) Exports ($ Million) 4,265 4,483 3,936 3,313 2,952 2,977 2,844 283 (3) Trade Balance ($ Million) (15,893) (16,797) (17,292) (17,181) (15,117) (15,729) (20,287) (1,422) (3) BALANCE OF PAYMENTS Net Foreign Assets at the Financial Sector ($ Million) (1,996) (1,537) (1,127) (1,407) (3,354) 1,238 (157) 236.9 (3) Foreign Assets at BDL ($ Billion) 32.24 35.74 35.29 37.86 37.09 40.71 41.99 43.41 (6) Gold Reserves at BDL ($ Billion) 14.40 15.31 11.10 10.95 9.85 10.71 11.96 12.20 (6) PUBLIC FINANCE Government Expenditures ($ Million) 11,675 13,321 13,640 13,952 13,528 14,867 13,634 (2) Government Revenues ($ Million) 9,333 9,396 9,420 10,879 9,576 9,923 10,259 (2) Budget Primary Deficit / Surplus ($ Million) 1,662 (110) (240) 1,307 724 21 1,442 (2) Total Deficit ($ Million) (2,342) (3,925) (4,220) (3,073) (3,952) (4,944) (3,376) (2) Deficit / GDP Ratio 5.84% 8.95% 9.17% 6.42% 7.99% 9.80% Debt Service / GDP Ratio 9.99% 8.25% 8.24% 9.16% 9.46% 9.84% Net Public Debt ($ Billion) 46.35 49.12 53.18 57.30 61.54 65.42 69.32 69.59 (3) Gross Public Debt/GDP Ratio 133.89% 131.49% 137.95% 139.16% 142.18% 148.72%* 152.29%* 156.14%* MONETARY AGGREGATES & INFLATION M4 ($ Billion) 103.50 110.00 117.41 124.53 131.17 139.20 145.16 145.81 (5) (M2-M1) ($ Billion) 35.82 39.32 40.56 43.27 46.25 47.95 45.45 46.42 (5) Monetization Level (M2/GDP Ratio) 99.32% 99.97% 98.97% 97.40% 102.46% 105.06% Change in CPI (%) 4.27% 4.68% 2.05% -1.66% -3.40% 3.14% 5.01% 5.55% (4) BANKING SYSTEM Number of Commercial Banks 54 54 56 55 53 50 49 (1) Number of Branches 948 962 985 1,020 1,039 1,056 1,063 (1) Total Assets ($ Million) 140,576 151,883 164,821 175,697 185,989 204,311 219,856 222,586 (3) Total Deposits ($ Million) 117,703 127,657 139,166 147,637 154,951 166,446 172,965 173,558 (3) Loans to the Private Sector ($ Million) 39,375 43,452 47,381 50,899 54,224 57,180 60,318 59,613 (3) Customer Loans/ Deposits 33.45% 34.04% 34.05% 34.48% 34.99% 34.35% 34.87% 35.35% (3) Dollarization Rate 65.92% 64.82% 66.14% 65.71% 64.88% 65.82% 68.72% 68.44% (3) 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 End of September, 2017, (2) As at End of November, 2017, (3) As at End of January,, (4) As at End of February,, (5) As at M arch 1,, (6) As at M id-m arch, SOURCE: CREDIT LIBANAIS ECONOMIC RESEARCH UNIT 17

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 18

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 19