Private Banks: Profits and More. Significant Increase in Credits, Deposits and Assets

Some banks in Syria reported profits driven by increased income from fees and commissions compared to interest income, according to al-Watan.

The financial statements of private banks in Syria indicate their financial performance until the conclusion of the third quarter of 2023 as follows:

  1. Syria International Islamic Bank:

   – Assets increased by 114%

   – Shareholders’ equity increased by 134%

   – Net profit: 19.2 billion SYPs

   – Earnings per share: 1902.95 SYPs

   – Book value per share: 327927 SYPs

  1. Fransabank:

   – Assets increased by 142%

   – Shareholders’ equity increased by 182%

   – Net loss (excluding unrealized cut differences): 9.227 billion SYPs

   – Profit per share: 5.088 SYPs

   – Loss per share (excluding unrealized differences): (175.75)

   – Book value per share: 7,890.95 SYPs

  1. Byblos Bank Syria:

   – Assets increased by 158%

   – Shareholders’ equity increased by 197%

   – Net loss: 8.1 billion SYPs

   – Earnings per share: 562519 SYPs

   – Book value per share: 84,756 SYPs

  1. Banque Bemo Saudi Fransi:

   – Assets increased by 143%

   – Shareholders’ equity increased by 232%

   – Net profit: 4.7 billion SYPs

   – Earnings per share: 393627 SYPs

   – Book value per share: 569116 SYPs

  1. Al-Sharq Bank:

   – Assets increased by 190%

   – Shareholders’ equity increased by 198%

   – Net profit: 15.2 billion SYPs

   – Earnings per share: 349975 SYPs

   – Book value per share: 526416 SYPs

  1. Bank of Syria and Overseas:

   – Assets increased by 165%

   – Shareholders’ equity increased by 221.3%

   – Net profit: 1.3 billion SYPs

   – Earnings per share: 326544 SYPs

   – Book value per share: 475731 SYPs

  1. Arab Bank – Syria:

   – Assets increased by 148%

   – Shareholders’ equity increased by 210%

   – Net profit: 6.5 billion pounds

   – Earnings per share: 608045 pounds

   – Book value per share: 8999 pounds

  1. Al-Baraka Bank – Syria:

   – Assets increased by 169%

   – Shareholders’ equity increased by 132%

   – Net profit: 34.4 billion SYPs

   – Earnings per share: 107797 SYPs

   – Book value per share: 190146 SYPs

According to Cham Bank’s data, the bank experienced significant growth in various aspects during the third quarter of 2023:

– Assets increased by 155%

– Shareholders’ equity increased by 173%

– Net profit reached 16.2 billion SYPs, a notable increase from the 740 million SYPs recorded in the same period of 2022

– Earnings per share amounted to 191,841 SYPs

– Book value per share stood at 3,077 SYPs.

In a parallel vein, the Bank of Jordan-Syria (BOJS) presented robust results for the same period:

– Assets increased by 112.2%

– Shareholders’ equity witnessed a remarkable surge of 194%

– Net profit amounted to 9.2 billion pounds, up from 2.5 billion SYP in the third quarter of 2022

– Earnings per share reached 4,950.92 SYP

– Book value per share was reported at 7,500 SYP.

The National Credit Bank also demonstrated a strong financial performance:

– Assets increased by 151.4%

– Shareholders’ equity rose by 176.3%

– Net profit reached 1.4 billion SYPs, compared to 196 million SYPs in the same period of 2022

– Earnings per share were 3,774.92 SYPs

– Book value per share stood at 5,994.97 SYPs.

QNBS displayed robust financial results for the third quarter of 2023:

– Assets surged by 179%

– Shareholders’ equity increased by 182%

– Net profit reached 32 billion SYPs, a significant increase from the 5.4 billion SYPs recorded in the third quarter of 2022

– Earnings per share were reported at 4,323.44 SYPs

– Book value per share stood at 6,699.28 SYPs.

International Bank for Trade and Finance (IBTF) also reported favorable results:

– Assets increased by 128%

– Shareholders’ equity rose by 180%

– Net profit reached 20.2 billion SYPs, up from 5.9 billion SYPs in the same period of 2022

– Earnings per share were 3,304.72 SYPs

– Book value per share was reported at 5,139.58 SYPs.

In the case of the National Islamic Bank:

– Assets increased by 114%

– Shareholders’ equity experienced a growth of 93%

– The bank recorded a loss, excluding differences in unrealized pieces, amounting to about 7.578 billion SYP, representing a decrease of 212%

– Earnings per share were reported at 70.38 SYP

– Loss per share, after excluding differences in unrealized pieces, was (30.31) SYP.

In an elucidation of the financial statements of private banks, Dr. Rasha Seroub, a researcher and academic, provided insights based on the disclosures of private banks listed on the Damascus Securities Exchange for the period ending on September 30, 2023. She highlighted several key observations:

Overall Performance:

   – All disclosures indicated a significant upswing in credit facilities, deposits, and assets.

   – Profits exhibited high growth rates.

   – Notably, Syria and Gulf Bank did not disclose its data for the entire period in 2023, though it is assumed that the necessary reports should have been published.

Capital Compliance:

   – Only Bemo Saudi Fransi and Qatar National Bank among the 11 conventional private banks fulfilled the condition of having a paid-up capital in compliance with Law 3 of 2010 (amended to be 10 billion SYPs for conventional banks).

   – Among the four Islamic banks, Cham Islamic Bank was the only one not meeting the capital requirement, which should be 15 billion SYPs according to the law.

Exchange Rate Impact:

   – The increase in deposits and assets, compared to the end of 2022, was significantly influenced by the change in the exchange rate. The US dollar’s exchange rate rose from 3015 SYP/$ at the end of 2022 to 8542 SYP/$ at the end of September 2023, representing a change of 183.32%.

   – This shift affected the valuation of all components in US dollars, including dollar assets, deposits, and balances abroad.

Impact on Profits:

   – After excluding exchange rate differences, the interim results for September 30, 2023, led to the conversion of profits into realized net losses for Byblos and Fransabank ( 8 billion SYP and 5 billion SYP respectively). These losses exceeded their paid-up capital and significantly reduced realized profits.

Credit Facilities to Deposits Ratio:

   – The analysis of the ratio of credit facilities to deposits, reflecting a bank’s efficiency in managing liquidity and optimizing deposit investments, revealed a low percentage, not exceeding 25% in most banks.

   – Cham Islamic Bank and Syria International Islamic Bank were exceptions, with ratios exceeding 100%, attributed to factors like deposit structure and liquidity availability.

Challenges to Optimal Investment:

   – The structure of deposits, dominated by current accounts and demand deposits, posed challenges to investing in long-term loans and facilities.

   – Large balances held outside Syria, with around 8.8 trillion Lebanese pounds abroad, constrained lending liquidity.

Profits from Fees and Commissions:

   – Some banks, including Bemo Saudi Fransi, al-Ahli Credit (formerly Audi), al-Sharq, and Syria and Overseas, reported profits driven by increased income from fees and commissions compared to interest income.

Dr. Seroub’s analysis provides a comprehensive view of the financial landscape, emphasizing the impact of regulatory compliance, exchange rate dynamics, and deposit structure on the banks’ financial outcomes.

 

 

This article was translated and edited by The Syrian Observer. The Syrian Observer has not verified the content of this story. Responsibility for the information and views set out in this article lies entirely with the author.

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