Determinants of deposits in Lebanese commercial banks-evidence from non-resident depositors

Abstract

Motivated by the continuous increase of non-residents deposits in Lebanon, this paper will try to investigate the determinants of these inflows from the perspective of foreign depositors. Through the use of 65 questionnaires filled by non resident depositors, this study found that there are some internal, external, bank related, social and behavioral factors that might affect non-resident deposits in Lebanese banks. More specifically, nonresident deposits respond positively to social factors such as abundance of relatives and frequent visits, positively to bank related factors such as the availability of e-banking, more international branches, and high interest rate, but negatively to external factors such as war. However, there was no support that bad political situation in Lebanon affected non-resident deposits. The findings suggest that banks should improve the convenience of access to funds of depositors and adopt more international standards to have better ratings in order to attract more deposits.