Blom Bank's nine-month profit climbs 7.3% despite difficult market conditions

The lender said its net income for the first nine months of this year climbed to $382.95 million

A man counts Lebanese pounds. Blominvest says its nine-moth profit rose despite difficult economic conditions. Reuters

Blominvest Bank, Lebanon’s biggest bank by assets, reported a 7.3 per cent rise in the first nine months of the year helped by managerial and cost efficiency, and income from its operations abroad.

The lender said its net income for the period ending September 30 climbed to $382.95 million (Dh1.41 billion).

The rate of return on average equity for the period reached 16.5 per cent and the rate of return on average assets was 1.5 per cent, Blom Bank added.

“In a difficult environment characterised by a slowing economy and continuing political paralysis, Blom Bank [has] managed to maintain steady profitability,” the lender said.

Lebanon is saddled with the highest debt-to-GDP ratio of about 150 per cent in the Middle East and North Africa region. The International Monetary Fund estimates this ratio could balloon to 180 per cent by 2023 if the government does not undertake reforms to narrow its fiscal deficit, which may reach 10 per cent of GDP. The country has struggled to boost growth and control its finances amid political wrangling over the formation of a new government and hosting over a million Syrian refugees.

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Prime Minister-designate Saad Hariri was appointed to form a government following the May parliamentary elections - the first held since 2009 - and has emphasised the importance of proceeding with long-delayed economic reforms.

“Blom Bank’s performance in the third quarter is a testimony to the success of its conservative yet flexible business model. It also looks forward to better operating conditions in the near future, with the formation of the new government,” the lender said without giving the third quarter profit figures.

Blom said total assets rose to $35.7bn, up 9.7 per cent from end of December 2017. Deposits rose by 1.71 per cent to $27.1bn, however, loans fell by about 3 per cent to $7.31bn.

“Results indicate a strong financial position for Blom Bank. The capital adequacy ratio settled at 18.5 per cent, primary liquidity at 80.5 per cent, loans coverage by specific provisions and real guarantees at 132 per cent, and the cost-to-income ratio at 35.1 per cent, which is the lowest among listed banks,” the bank said.