LEBANON WEEKLY REPORT

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1 Lebanon ranks 16 th largest recipient of remittances worldwide, going down by a yearly 3.3% in 2015 The World Bank estimates expatriate remittances to Lebanon at USD 7,163 million in Remittances to Lebanon account for 16.2% of GDP in 2014, highest ratio among Arab countries. The World Bank estimates inflows of remittances to Lebanon at USD 7,163 million in 2015, a 3.3% decrease from USD 7,404 million in 2014, and an 11.4% drop from USD 8,085 million in Lebanon ranks as the 16 th largest recipient of remittances globally and the 11 th highest among developing countries. It also ranks as the 2 nd largest remittances receiver among Arab countries, preceded only by Egypt which received USD 19,710 million in Further, expatriate remittances to Lebanon accounted for 16.2% of GDP in 2014, constituting the largest among Arab countries in Source: World Bank, Bankmed Research Bankmed - Market & Economic Research Division 1

2 The number of containers at the Port of Beirut, including transshipment, increased by an annual rate of 6.8% in the first quarter of 2016 The number of imported cars via the Port of Beirut increased by 11% y-o-y to reach 20,507. According to the latest figures released by the Port of Beirut, the number of imported cars via the port of Beirut reached 20,507 in the first quarter of 2016, increasing by 11% from 18,470 in the same period of the previous year, while the number of containers (excluding transshipment) went up by an annual 18% to reach 193,601. As for the number of transshipments, it decreased by 14% annually to reach 76,275 containers in the first three months of The number of ships that used the port during January-March 2016 jumped by a yearly 18.8%, amounting to a total of 574 ships. Source: Port of Beirut, Bankmed Research Bankmed - Market & Economic Research Division 2

3 Overall tourist spending in Lebanon drops by a yearly 12% in the first quarter of 2016 Visitors from UAE took the largest share of tourist spending in Lebanon accounting for 15% of total tourist expenditures in Q Saudi Arabian and Iraqi visitors' spending recorded the steepest yearly declines by 23% and 27%, respectively. In the latest report for the first quarter of 2016, Global Blue Lebanon, the VAT refund operator, reported a 12% decrease in tourist spending in Lebanon compared to the first quarter of The figures published by Global Blue Lebanon represent purchases by tourists in Lebanon whose VAT was claimed giving a fair view on tourist shopping trends. The spending distribution by country of residence shows that visitors from the UAE took the largest share of tourist spending in Lebanon accounting for 15% of total tourist expenditures in Q Spending of tourists from Saudi Arabia came second with a share of 14%. As to the spending evolution by country, the report reveals that tourist spending from Syria showed the highest yearly increase of 11% in Q when compared to Q1 2015, followed by tourist spending from Jordan and France with respective increases of 6% and 3%. However, Saudi Arabian and Iraqi visitors spending recorded the steepest yearly declines by 23% and 27%, respectively. With regard to the spending distribution by region, Beirut attracted 79% of total spending, and it was followed by a 15% and 3% share for the areas of Metn and Baabda, respectively. A closer look on the spending evolution by area reveals that tourist spending in Metn surged by a yearly 13%, while that in Jbeil dropped by 38%. Spending Evolution by Country Q Q Source: Global Blue Lebanon, Bankmed Research Bankmed - Market & Economic Research Division 3

4 The tourist spending evolution showed decreases in all categories with souvenirs and gifts recording the largest yearly drop by 33% in Q In terms of spending distribution by category, the report reveals that fashion and clothing accounted for the largest share of 70% of total tourist spending in Q followed by watches and jewelry with a 17% share. The tourist spending evolution showed decreases in all categories with souvenirs and gifts recording the largest yearly drop by 33%, followed by consumer electronics and household appliances with a 25% year-on-year decrease in Q Spending Evolution by Category Q Q Source: Global Blue Lebanon, Bankmed Research Bankmed - Market & Economic Research Division 4

5 BANKING & FINANCE Central Bank s assets reach USD 94.7 billion at mid-april 2016 with USD 11.3 billion in gold reserves BDL s total reserves including gold, reached USD 47.6 billion at mid- April Banque du Liban (BDL) s bi-monthly balance sheet as at mid-april 2016 reported total assets of USD 94.7 billion, indicating an increase of 6.5% from mid-april 2015 (USD 88.9 billion) and going up by 4.2% from end-december 2015 when they amounted USD 90.9 billion. Gold stood at USD 11.3 billion as of mid-april 2016, slightly decreasing by 0.3% from end-march 2016 but going up by 3.2% from USD 11 billion in mid-april Foreign assets went down by 5% yearly and by 0.8% on a bi-weekly basis to reach USD 36.3 billion at mid-april Loans to the local financial sector increased by 20% yearly and by 1% on a bi-weekly basis to reach USD 5.4 billion in the same period. With respect to liabilities, BDL reported a yearly 9.3% increase in financial sector deposits to reach USD 75.9 billion at mid-april 2016, accounting for around 80% of total liabilities along with a 32% y-o-y decrease in public sector deposits amounting to USD 5.1 billion at mid-april Source: BDL, Bankmed Research Bankmed - Market & Economic Research Division 5

6 BANKING & FINANCE Deposits denominated in foreign currencies decrease by USD 123 million during the week of April 1 7, 2016 Term and saving deposits in LBP went down by USD 129 million during the 14 th week of the year. On the monetary front, the overall money supply M4 decreased by 0.3% during the week of April 1 7, 2016 to around USD billion, while the non-banking sector treasury bills portfolio progressed by USD 28 million during the same week. Lebanese Pound denominated deposits and currency in circulation M1 decreased by 1.9% (or USD 110 million) during the aforementioned week to USD 5.8 billion. This is mainly due to a decrease in demand deposits by USD 154 million which outweighed a USD 44 million increase in money in circulation. In parallel, local currency term deposits M2 dropped by USD 239 million during the same week but registered a twelve-month increase of 7.38% to stand at USD 52.3 billion. The private sector term and saving deposits denominated in LBP (M2 - M1) went down by USD 129 million during the mentioned week to around USD 46.5 billion, while deposits denominated in foreign currencies (M3 - M2) decreased by USD 123 million during the week to reach USD 71.9 billion. Source: BDL, Bankmed Research Mazen Soueid, Stephanie Ghanem, Ziad Hariri, Rita Nehme and Nadine Abdel Fattah Disclaimer This material has been prepared by Bankmed, sal based on publicly available information and personal analysis. It is provided for information purposes only. It is not intended to be used as a research tool nor as a basis or reference for any decision. The information contained herein including any opinion, news and analysis, is based on various publicly available sources believed to be reliable but its accuracy cannot be guaranteed and may be subject to change without notice. Bankmed, sal does not guarantee the accuracy, timeliness, continued availability or completeness of such information. All data contained herein are indicative. Neither the information provided nor any opinion expressed therein, constitutes a solicitation, offer, personal recommendation or advice. Bankmed, sal does not assume any liability for direct, indirect, incidental or consequential damages resulting from any use of the information contained herein.