Lebanon’s banks stuck in reverse: jobs go, lending dives

Lebanon’s banks stuck in reverse: jobs go, lending dives

BEIRUT - Lebanon's banks, which once powered the economy by sucking in billions of dollars of deposits from abroad, are shedding staff, watching loan books shrink and chasing liquidity to stay afloat. About 3,000 bankers, or more than 10% of the banking industry workforce, have resigned or lost their jobs so far since a financial crisis flared up in late 2019 - and the numbers keep rising, four senior bankers told Reuters. De facto capital controls are in place, depositors are locked out of most of their savings and lending to the private sector has plummeted. In April, bank loans had fallen by 25% year on year to $33 billion, according to a Byblos Bank note. "The sector is dead. It doesn't lend, it doesn't make profits", said one of the bankers, who requested anonymity. Banks are facing their biggest challenge since a 1975-1990 civil war, a conflict which by some measures gave the lenders a smaller hangover. This crisis has left the industry nursing losses worth $83 billion, according to a government report last year, dwarfing Lebanon's 2019 economic output of $55 billion. "The crisis in Lebanon essentially is first of all a banking collapse," said Toufic Gaspard, an