BDL Figures show that the net investment portfolio of Lebanese banks and financial institutions in foreign debt and equity securities totaled $5.4bn at end-March 2012, constituting a decrease of 22.2% from $6.94bn at end-March 2011. Investments in long-term debt securities totaled $3.2bn at end-March 2012, accounting for 58.6% of the total, followed by investments in equities with $2.18bn, or 40.4% of the total, while short-term debt securities accounted for $54.4m or 1% of the total. According to the Central Bank, the figures cover the net assets of resident financial institutions in tradable debt and equity instruments of non-resident issuers. They help provide a clearer picture about the flow of funds from Lebanon and, therefore, about balance of payments data.
The distribution of investments by institutions indicates that commercial banks' net portfolio in foreign long-term debt securities totaled $2.4bn, accounting for 75% of total investments in such securities at end-March 2012. The figure includes banks' investment for their own account, on behalf of their clients and on a custodial basis. They were followed by medium and long-term banks with $740.6m (23.4%), financial institutions with $46.9m (1.5%) and insurance firms with $2.8m (0.09%). Commercial banks also represented 93.4% of investments in short-term debt securities, followed distantly by medium and long-term banks with 5.2% and financial institutions with 1.3%.
In parallel, commercial banks' net assets in equity securities totaled $852.5m, accounting for 39.1% of total investments in such securities. They were followed by financial institutions with $697.1m (32%), medium and long-term banks with $557.7m (25.6%), insurance companies with $71.6m (3.3%) and financial intermediaries with $1.6m (0.07%).
The distribution of investments by destination shows that the United States was the leading recipient of equity investments by financial institutions operating in Lebanon, reaching $923m and accounting for 42.3% of the total at end-March 2012. It was followed by the United Kingdom with $344m (15.8%), Bahrain with $236.5m (10.8%), Jordan with $117.4m (5.4%) and France with $110.9m (5.1%), while other countries accounted for the remaining 20.6%. In parallel, the United Kingdom accounted $824.9m, or 26.1% of investments in long-term debt securities, followed by the United States with $596m (18.9%), the UAE with $330.6m (10.5%), France with $276.1m (8.7%), and Qatar with $146.8m (4.6%), while other countries accounted for the remaining 31.2%. Further, Switzerland accounted for 38.7% of investments in short-term debt securities, followed by the United Kingdom with 25.2% and the UAE with 11.7%.
Central Bank, Byblos Research