Commercial banks operating in Lebanon added LBP 6.13 trillion, roughly $68.52 million, to their combined capital accounts in the first five months of 2026, according to statistics published by Banque du Liban. Total equity in the resident banking sector reached LBP 446.67 trillion, around $4.99 billion, at the end of May, up 1.39% from LBP 440.54 trillion at the close of 2025.
The annual comparison is more striking. Bank equity stood 23.05% higher than the LBP 363.01 trillion recorded at the end of May 2025, a gain of LBP 83.66 trillion, or about $934.72 million, in twelve months.
May's Push Came From Core Capital
Month to month, the path was uneven. Capital accounts rose by LBP 19.41 trillion ($216.92 million) in May, after a smaller increase of LBP 8.53 trillion ($95.26 million) in April and a drop of LBP 29.75 trillion ($332.38 million) in March. Almost all of May's gain came from core capital, which added LBP 19.36 trillion, while supplementary capital edged up by just LBP 0.06 trillion.
A Balance Sheet Still Contracting
That equity build-up stands out against a sector that keeps getting smaller. The combined balance sheet of commercial banks narrowed by 1.67%, or LBP 153.22 trillion, since December 2025 to LBP 9,002.89 trillion. Total assets were also 1.55% below their level of May 2025.
Customer deposits, the sector's main funding source, dropped 1.54% since the start of the year to LBP 7,750.19 trillion. Resident private sector deposits fell 1.68% to LBP 5,788.27 trillion, non-resident private deposits slipped 0.62% to LBP 1,904.33 trillion, and public sector deposits sank 15.55% to LBP 57.58 trillion. Over a full year, total deposits are down 3.07%, a loss of LBP 245.84 trillion.
Deposits Are Now 98.76% Dollarized
The currency split of deposits keeps tilting toward foreign currency. Deposits held in Lebanese pounds fell 13.43% since the start of the year to LBP 96.36 trillion, while foreign currency deposits declined a milder 1.37%, or $1.19 billion, to $85.52 billion. In May alone, pound deposits shed LBP 4.80 trillion and foreign currency deposits lost $128.97 million. As a result, the deposit dollarization rate climbed to 98.76%, up from 98.59% at the end of 2025.
Lending Stays Close to the Floor
Credit to the private sector barely moved. Loans to residents and non-residents dipped 0.33% in the first five months of 2026 to LBP 463.84 trillion. Pound-denominated loans grew 8.01% to LBP 11.26 trillion, still a small base, while foreign currency loans eased 0.52% to $5.06 billion. Compared with May 2025, the loan portfolio is 5.71% smaller.
The ratio of loans to deposits stood at 5.98% at the end of May, slightly above the 5.91% recorded in December 2025 but below the 6.15% of a year earlier. At roughly $5 billion in equity against $85.52 billion in foreign currency deposits alone, the sector's rebuilt capital remains a fraction of the claims sitting on the other side of its balance sheet.
