The performance of banks in post-war Lebanon

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dc.contributor.author Raad, Elias
dc.contributor.author Peters, David
dc.contributor.author Sinkey, Joseph F.
dc.date.accessioned 2016-10-27T08:44:33Z
dc.date.available 2016-10-27T08:44:33Z
dc.date.copyright 2004 en_US
dc.date.issued 2016-10-27
dc.identifier.issn 1083-4346 en_US
dc.identifier.uri http://hdl.handle.net/10725/4706 en_US
dc.description.abstract This paper analyzes the performance and balance-sheet characteristics of banks in post-war Lebanon for the years 1993 to 2000. Although we find that Lebanese banks are profitable, most of them had accounting return on assets (ROA) greater than one percent over most of our test period, they are not as profitable as a control group of banks from five other countries located in the Middle East. Bank safety and soundness in Lebanon has increased as leverage was reduced (capital adequacy improved) and a risk index indicates lower probabilities of book-value insolvency. We attribute this improved bank performance and safety to better management and to three external factors: political (cessation of war), economic (lower inflation), and regulatory (BIS capital requirements). We employ regression models that relate bank profitability ratios to various explanatory variables. We find, for example, that ROA is positively associated with lagged growth in real GDP, spread or net interest margin, and holdings of Lebanese T-bills but negatively related to bank size as measured by the natural log of total assets. As a policy implication, we recommend that Lebanese banks increase their lending to the private sector to achieve a more efficient allocation of resources and to stimulate economic growth. To help achieve this objective, Banque du Liban, the central bank, should abandon its practice of setting T-bill rates above market levels, which provides a disincentive to bank lending. en_US
dc.language.iso en en_US
dc.title The performance of banks in post-war Lebanon en_US
dc.type Article en_US
dc.description.version Published en_US
dc.author.school SOB en_US
dc.author.idnumber 199590190 en_US
dc.author.department Department of Finance and Accounting (FINA) en_US
dc.description.embargo N/A en_US
dc.journal.volume 9 en_US
dc.journal.issue 3 en_US
dc.article.pages 259-286 en_US
dc.keywords Lebanese banks en_US
dc.keywords Financial performance en_US
dc.keywords Bank capital en_US
dc.keywords Safety and soundness en_US
dc.identifier.ctation Peters, D. W., Raad, E., & Sinkey, J. F. (2004). The performance of banks in post-war Lebanon. International Journal of Business, 9(3), 259-286 en_US
dc.author.email eraad@lau.edu.lb en_US
dc.identifier.tou http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php en_US
dc.identifier.url https://papers.ssrn.com/sol3/papers.cfm?abstract_id=551081 en_US

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