1. Overview of the Lebanese Economy and Banking Industry Presentation to the delegation of The Banks Association of Turkey Beirut- December 3, 2010 Dr. Makram Sader Secretary General Association of Banks in Lebanon

2. 2 I- Economic Growth II- Public Finances III- External Accounts IV- Financial Intermediation

3. Real Sector Indicators 3 Sources: IMF Article IV- BDL- Economic Accounts of Lebanon- Lebanese customs.

4. Aggregate Demand and Supply USD billion and % 4 Source: Lebanon's Economic Accounts 2008

5. Public Finances 5 Sources: MOF, BDL *Adjusted to include all telecom revenues.

6. Total debt structure in % 6 Source: BDL Public debt holders* in % * Estimations

7. Balance of Payments million USD 7 * Estimates - IMF Article IV ** Projections- IMF Article IV *** For Information Sources: IMF- BDL- ABL

8. Structure of the Banking Industry 8

9. Lebanese Banking Presence Abroad 9

10. Consolidated Balance Sheet of Commercial Banks million USD - End of period 10 Source: BDL

11. 11 Consolidated Balance Sheet of Commercial Banks change in % Source: BDL

12. Dollarization The net trading position against the Lebanese pound must not exceed 1% of shareholder's equity while the global position cannot exceed 40% of shareholder's equity. A structural position of 60% of shareholder's equity is authorized to hedge the capital in LBP against fluctuations in the exchange rate. Banks are required to maintain at least 10% of their foreign currency liabilities as net liquid assets and at least 15% as required and remunerated deposits in FC at BDL. 12 Source: BDL in %

13. Weighted Average Spread (LBP and FC Markets) 13 Source: BDL

14. Indicators of the Lebanese Banking Sector Performance 14 * Cash and deposits at BDL + Treasury bills in LBP & Eurobonds ( with less than 1 year maturity) + foreign assets (excluding claims on non-resident private sector)

15. Key Prudential Practices 15

16. Financial Soundness Indicators- Regional comparison (latest available) 16 (1)Latest figure: Net Problem Loans/Net Total Loans- IMF Article IV Oct. 2010. (2) Includes provisions against problem loans and general provisions. (3) after taxes. Source: Global Financial Stability Report/IMF, October 2010.

17. Bank Revenue Composition in % of total- 2009 17 Source: R. Ariss' calculations from Bankscope.

18. Selected Indicators on the Size of the Capital Markets, 2009 (In billions of U.S. dollars unless noted otherwise) 18 Source: Global Financial Stability Report/IMF, October 2010. a- Includes Euro area countries, Denmark, Sweden and UK. b- Hong Kong, Korea, Singapore and Taiwan province of China. c - Commercial banks balance sheet

19. Selected Indicators on the Size of the Capital Markets, 2009 Structure and percentage of GDP 19 Source: Global Financial Stability Report/IMF, October 2010. *includes Euro area countries, Denmark, Sweden and UK. * Hong Kong, Korea, Singapore and Taiwan province of China.