ECONOMY Beirut recorded the 3 rd lowest occupancy rate among Arab markets. The average room rate in Beirut hotels was USD 169 in 2013, down from USD 201 in 2012. OCCUPANCY RATE AT BEIRUT HOTELS REACHES 51% IN 2013 The 2013 Middle East Hotels Benchmark Survey by Ernst & Young indicated that the average occupancy rate at Beirut four-star and five-star hotels was 51% during 2013, falling down by 3 percentage points from 54% in 2012. Beirut achieved the third lowest rate after Manama and Cairo among Arab markets. The survey stated that the average rate per room at Beirut hotels was USD 169 in 2013 ranking the capital s hotels as the 11th most expensive in the region. It added that the average rate per room in Beirut decreased by 15.7% year-on-year relative to a 0.6% rise for hotels in the Middle East. Further, Ernst & Young indicated that revenues per available room (RevPAR) reached USD 87 in 2013 going down from USD 110 in 2012. Beirut hotels achieved the 12th highest RevPAR in the region last year. Regionally, the survey showed that the highest levels of occupancy were achieved in Dubai, Jeddah and Abu Dhabi, with levels of 80%, 79% and 77% respectively in 2013. The weakest performers, with occupancy levels of 42% and 24% were Manama and Cairo. In terms of RevPAR in 2013, the strongest performer was Dubai with an earning rate of USD 223. Source: Ernst & Young, BankMed Research BankMed - Market & Economic Research Division 1
ECONOMY City 2013 Middle East Hotel Survey: Performance Indicators in Selected Cities Annual Occupancy rate (%) Average Room rate (USD) RevPAR (USD) Dubai 80 4 223 Abu Dhabi 77 207 160 Muscat 68 210 144 Doha 64 252 163 Amman 61 155 96 Riyadh 58 218 127 Kuwait 55 296 163 Beirut 51 169 87 Manama 42 205 87 Cairo 24 85 21 Source: Ernst & Young, BankMed Research The Coincident Indicator registered an average of 264.7 points in 2013 compared to 256.6 points in 2012. COINCIDENT INDICATOR IMPROVES BY 2% Y-O-Y IN DECEMBER 2013 The coincident indicator, the composite indicator of economic activity in Lebanon as monitored by the Central Bank, reached 267.9 points in December 2013, rising up by 2% from 262.5 points recorded in the same month last year but dropping down 3.9% from 278.8 points in November 2013. Overall, the twelve-month period from December 2012 to December 2013 witnessed five monthly declines in April 2013, June 2013, July 2013, August 2013 and December 2013. The coincident indicator is an average of 8 weighted economic indicators including electricity production, cement deliveries, cleared checks, money supply M3, passenger flows, imports of petroleum derivatives, total imports, and exports. 300! BDL Coincident Indicator! 290! 280! 270! 260! 250! 240! 230! 220! 210! Dec-11! Jan-12! Feb-12! Mar-12! Apr-12! May-12! Jun-12! Jul-12! Aug-12! Sep-12! Oct-12! Nov-12! Dec-12! Jan-13! Feb-13! Mar-13! Apr-13! May-13! Jun-13! Jul-13! Aug-13! Sep-13! Oct-13! Nov-13! Dec-13! BankMed - Market & Economic Research Division 2
Lebanon and Gulf Bank s net loans increased by 16.5% while customers deposits went up by 9.8% BANKING & FINANCE LEBANON AND GULF BANK POSTS A 21.5% INCREASE IN NET PROFITS IN 2013 Lebanon and Gulf Bank (LGB Bank) declared net profits of USD 22.70 million in 2013, rising up by 21.5% from USD 18.68 million recorded in 2012. Total assets reached USD 2.71 billion in 2013 compared to USD 2.40 billion at end-2012 (+13%), while net customers loans increased by 16.5% in 2013, reaching USD 1.06 billion as at 31/12/2013. The Bank s customers deposits reached USD 2.36 billion in 2013, rising up from USD 2.15 billion at end-2012 (+9.8%). Also, the shareholders' equity amounted to USD 244.6 million in 2013 going up by USD 54.8 million from end-2012. Lebanon and Gulf Bank Financials in 2013. Dec-13 Dec-12 % change Total Assets (billion USD) 2.7 2.4 12.9% Net Customers' Loans (billion USD) 1.1 0.9 16.5% Total Deposits (billion USD) 2.4 2.2 9.8% Total Equity (million USD) 244.6 189.8 28.9% Net Profits (million USD) 22.7 18.7 21.5% Source: Company Data, BankMed Research Source: Company Data, BankMed Research BankMed - Market & Economic Research Division 3
BANKING & FINANCE BDL s gold reserves dropped by 21% yearly, while foreign assets increased by 3% at mid-february 2014. CENTRAL BANK S ASSETS REACH USD 79.4 BILLION AT MID-FEBRUARY 2014 WITH USD 11.9 BILLION IN GOLD RESERVES Banque du Liban (BDL) s bi-monthly balance sheet as of mid-february 2014 reported total assets of USD 79.4 billion, indicating an increase of 3.2% from mid-february 2013 (USD 76.9 billion) and going up by USD 1,288 million from end-january 2014 when they amounted USD 78.1 billion. Gold stood at USD 11.9 billion as of mid-february 2014 rising up by USD 464 million from end-january 2014 but went down by 21% from USD 15.02 billion in mid-february 2013. Foreign assets rose by 2.8% yearly and by 1.9% on a bi-weekly basis to reach USD 36.3 billion at mid-february 2014. Loans to the local financial sector increased by 60% yearly and by USD 43 million from end-january 2014 to reach USD 2.6 billion in the same period. With respect to liabilities, BDL reported a yearly 7% increase in financial sector deposits to reach USD 58.6 billion at mid-february 2014, accounting for around 74% of total liabilities along with a 31% y-o-y rise and a bi-weekly 7% increase in public sector deposits amounting to USD 7.9 billion at mid-february 2014. BankMed - Market & Economic Research Division 4
BANKING & FINANCE The private sector term and saving deposits in LBP jumped by USD 55 million during the sixth week of the year. DEPOSITS DENOMINATED IN FOREIGN CURRENCIES CONTRACTED BY USD 98 MILLION DURING THE WEEK OF 31 JANUARY- 6 FEBRUARY 2014 On the monetary front, the overall money supply M4 increased by 0.2% during the week of January 31- February 6, 2014 to around USD 117.5 billion, while the non-banking sector treasury bills portfolio increased by USD 133 million over the preceding week. Lebanese Pound denominated deposits and currency in circulation M1 increased by 2.9% (or USD 133 million) during the aforementioned week to around USD 4.7 billion. This is mainly due to an increase in money in circulation by USD 318 million which outweighed a USD 185 million drop in demand deposits. Moreover, local currency term deposits M2 increased by USD 189 million during the same week and registered a twelve-month increase of 5.47% to stand at USD 45.7 billion. The private sector term and saving deposits denominated in LBP (M2 - M1) went up by USD 55 million during the mentioned week to USD 41 billion while deposits denominated in foreign currencies (M3 - M2) decreased by USD 98 million during the week to reach USD 65.3 billion. Money Supply Week of 31 January - 6 February 2014 (billion USD) 30-Jan-14 6-Feb-14 Absolute change over week M1 4.599 4.732 0.133 M2 45.535 45.723 0.189 M3 110.960 111.051 0.091 M4 117.261 117.484 0.224 M2-M1 40.936 40.991 0.055 M3-M2 65.426 65.328-0.098 M1 = Currency in Circulation + Demand Deposits in LBP M2 = M1 + Other deposits in LBP M3 = M2 + Deposits in FX M4 = M3 + TBs held by non banking system including accrued interests BankMed - Market & Economic Research Division 5
BUSINESS ADVERTISING SPENDING IN LEBANON GREW BY 21% IN 2013 Advertising expenditures in Lebanon across all media totaled USD 1.49 billion in 2013. The 2013 annual survey of the advertising market in the Arab world prepared by ArabAd magazine and research firm Ipsos-Stat shows that advertising expenditures in Lebanon totaled USD 1,489 million in 2013, ranking 5th among 13 Arab markets. The survey argues that despite the political instability in Lebanon, the advertising expenditures witnessed a 21% yearly growth from USD 1,230 million in 2012. The media leading the growth in Lebanon is TV where spending grew from USD 938 million to USD 1,160 million in 2013. Outdoor media expenditures followed with a yearly growth of 24% to USD 1,160 million in 2013. In parallel, the survey revealed that three Lebanese Banks ranked among the top 10 spenders in the all media brand category, namely BankMed (4th), Banque Libano-Francaise (5th) and BLOM Bank (10th). It is noteworthy that BankMed ranked first in terms of press ad spending. Advertising Expenditures- All Markets- All Media Country Amount in million USD *The satellite Arab media channels Amount % Pan Arab* 7,478.4 35 Egypt 5,971.0 27 UAE 2,024.3 9 KSA 1,604.0 7 Lebanon 1,488.9 7 Kuwait 948.2 4 Iraq 667.4 3 Pan Asian 453.0 2 Qatar 384.6 2 Jordan 326.4 2 Oman 261.7 1 Bahrain 156.2 1 Syria 3.0 0 Total 21,767.2 100 Source: ArabAd Magazine, BankMed Research BankMed - Market & Economic Research Division 6
BUSINESS Adverstising expenditure by Media in Lebanon- 2013 Media Source: ArabAd Magazine, BankMed Research Amount in Million USD Amount % TV 1,167.1 78 Outdoor 167.1 11 Newspaper 54.6 4 Radio 53.7 4 Magazine 45.2 3 Cinema 1.2 0 Total 1,488.9 100 Source: ArabAd Magazine, BankMed Research Lebanon Top 10 Brands- All Media 1- Buzz 2- XXL 3- Super Star Medicines 4- BankMed 5- Banque Libano-Francaise 6- Nescafe 7- Jane Nassar 8- Freez 9- Moukarzel 10- BLOM Bank Mazen Soueid, Stephanie Ghanem, Ziad Hariri, Nadine Yamout, and Rita Nehme Disclaimer This material has been prepared by BankMed, sal based on publicly available information and personal analysis. It is provided for information purposes only. It is not intended to be used as a research tool nor as a basis or reference for any decision. The information contained herein including any opinion, news and analysis, is based on various publicly available sources believed to be reliable but its accuracy cannot be guaranteed and may be subject to change without notice. BankMed, sal does not guarantee the accuracy, timeliness, continued availability or completeness of such information. All data contained herein are indicative. Neither the information provided nor any opinion expressed therein, constitutes a solicitation, offer, personal recommendation or advice. BankMed, sal does not assume any liability for direct, indirect, incidental or consequential damages resulting from any use of the information contained herein.