Byblos Bank reported on Friday that its net profit at the end of 2003 reached $46.3 million, an increase of 5.21 percent compared to 2002.
As a result, return on assets and return on equity stood at 0.82 percent and 12.1 percent respectively.
The increase in net income was due to good management of net interest margin compared to peers and which dropped slightly from 2.3 percent in 2002 to 2.2 percent in 2003.
“The bank was able to maintain its net margin in an environment of lower interest rates on deposits and loans and without exposing the bank to higher interest rate and other risks,” the bank said in a statement.
Byblos was also able to better control the pool of its operating expenses and increase its efficiency and productivity where cost-to-income ratio dropped from 56.8 percent in 2002 to 54 percent in 2003.
The bank’s total assets rose by 14.1 percent to reach $6.037 billion at the end of 2003, the same increase as other Lebanese banking sectors.
Total customer deposits increased by 14.5 percent to $4.922 billion compared an increase of 13 percent in the Lebanese banking sector.
Customer loans fell by 1.4 percent to $1.86 billion in 2003 due to the lack of demand for loans despite the fall in interest rates which was explained by the slowdown in economic activity.
Net non-performing loans represented 4.1 percent of the bank’s gross loans.
“The portfolio of Lebanese government securities dropped by 36.1 percent to reach $1.399 billion in 2003. As a result, Lebanese government securities to total assets fell from 41.4 percent at the end of 2002 to 23.2 percent at the end of 2003,” added the bank’s statement.
This falls within the bank’s strategy to reduce its exposure to such securities.
The bank’s exposure to Lebanese-denominated certificates of deposits issued by the Central Bank, which have the same risk profile as Lebanese government securities, was one of the lowest among peers.
Byblos increased its liquidity levels in 2003, where liquid assets represented 76.6 percent of total assets, up from 73.1 percent at the end of 2002.