Syrian banks are braced for worst-case scenarios after profits tumbled from as low as 40 per cent to more than 90 per cent last year.
Syria's banks brace for worst as civil war batters economy
Syrian banks are braced for worst-case scenarios after profits tumbled by between 40 and 90 per cent last year as the civil war further batters an already weakened financial sector.
Byblos Bank Syria, whose major shareholder is Lebanon's third-largest lender by assets, said it had developed a "detailed emergency plan for each of the bank's businesses" in a statement to the Damascus Securities Exchange.
"The necessary requirements, from staff to equipment and communication, were determined to ensure business continuity at an alternative location" in Syria.
Profits at the foreign-backed bank last year tumbled 94.7 per cent from 2011 to 9.93 million Syrian pounds (Dh514,576). Deposits fell 27 per cent to 25.7 billion pounds, as credit facilities dropped to 17.25bn pounds from 23.8bn pounds.
The bank took provisions worth 525.5m pounds for bad loans. Syria's private lenders, considered the crown jewels of president Bashar Al Assad's economic modernisation plan, are struggling with a mismatch of assets and liabilities.
Banking transactions such as trade finance or corporate lending have taken a big hit, while basic banking services continue despite the challenging environment.
Byblos Bank Syria is one of six Syrian foreign-backed banks to have reported a drastic decline in their bottom line last year.
Fransabank Syria, another Lebanese-backed lender, said profits had dropped 62 per cent to 56m pounds last year from a year earlier, according to a regulatory filing.
Jordan's Arab Bank said profits at its Syrian unit fell 44 per cent to 254.89 million pounds from 2011.
Syria Gulf Bank reported a 97 per cent drop in net income to 8m pounds from the year earlier.
The lender, whose biggest shareholder is Bahrain's United Gulf Bank, said it "set up procedures and policies aimed at limiting these risks that include early warning indicators and adequate emergency plans to preserve business continuity".
Syria International Islamic Bank, in which the largest shareholder is Qatar International Islamic Bank, said profit fell 60 per cent to 346.92m pounds from a year earlier.
The bank was put under United States sanctions in June, accused of acting as a conduit for Commercial Bank of Syria, which is also under US and international sanctions.
The IMF has not provided figures on the Syrian economy since the start of violence in March 2011.
"The state of the economy is not a functional one that is witnessing a slowdown," said Ibrahim Saif, an economics export at the Carnegie Middle East Center in Beirut. "It is witnessing a war with the physical destruction of facilities on the ground, which makes any logical analysis of the economy sound irrational.
"This is now to be expected given the crisis and given the government is losing its grip," said Mr Saif. "Honestly speaking, I expected this to happen earlier and to be worse than what it is now."