For the Revival of the Decree on the Banking Free Zone Salim Sfeir Calls for a Lebanon that Attracts Deposits Instead of repelling them
Chairman of the Board – CEO of Bank of Beirut Dr. Salim Sfeir highlighted the need for expanding the economy and removing the obstacles through policies that help provide liquidity, stimulate and protect investments in national industries, restore confidence, improve risk levels, reduce interest rates on lending and reactivate the real estate sector. He also stressed on the need for keeping Lebanon as a country attracting deposits instead of repelling them.
These statements came in the context of a press conference held by Sfeir in the presence of the Secretary General of the Union of Arab Banks Wissam Fattouh, the President of the Lebanese Press Syndicate Aouni al-Kaaki, the President of Lebanon’s Syndicate of Editors Joseph Kossaifi and a number of representatives and delegates from local, regional and international media.
Nevertheless Sfeir confirmed his optimism and faith in the monetary, banking and financial situation, underlining that any request from banks to cooperate and participate in reducing the burden of debt must be objective and voluntary and in coordination with the Association of Banks and the Central Bank of Lebanon, otherwise Lebanon’s credit rating will be negatively affected.
He also assured that the banks have never refrained from backing up the State and paid 2 billion dollars in taxes in 2018, but the burden of double taxation imposed since 2017 contributed to the drop in the revenues of banks. The tax rate that approached 40% coupled with a tax of 10% on distribution implies that insisting on raising the tax rate to 10% will raise the actual tax to 50% and even more, compared to 17% on other sectors; this tax may reach more than 75% on small and medium-size banks, which threatens their continuity, while they are well needed for the national economy.
Sfeir warned from the tax rate increase on deposits, saying that it will affect the medium and small depositors who rely on the interests in their daily lives, as well as the large depositors who have multiple options in the foreign markets; it will also affect non-resident deposits, at a time where attraction of deposits is much needed, he added.
He called for reviving the decree related to the creation of a free banking zone as this would attract non-resident deposits in the context of a targeted financial and economic policy.
Sfeir denounced stifling the Central Bank of Lebanon or interfering in its mechanism of action, calling for promoting the strengths of our institutions and economy instead of striking the economy and its components. He called on everyone to spread trust and stop frightening people by talking about a presumed collapse, supporting the stands of the Association of Banks and its vision of keeping the balance between the interests of the country and maintaining an active and productive banking sector.
Kaaki: Kaaki declared that “Lebanese banks have ranked among the most important ones in the region enjoying an excellent reputation, noting that the banking secrecy that is being observed in Lebanon has helped in the growth and development of the banking sector. Amidst such circumstances, we have to cling to our banking and financial system since the alternative is a communism system that proved to be a failure everywhere in the world”.
He mentioned that “Bank of Beirut, with its open-culture policy could penetrate international financial markets to reach Australia and thus became the main financial link between the Lebanese diaspora and Lebanon”.
Kossaify: Kossaify declared: “Dr. Salim Sfeir, Chairman and CEO of Bank of Beirut is not just a banker; he is a man with many diversified interests of public concerns, which lead to the birth of major projects aimed at promoting the trust of the Lebanese in their country and anchoring their relationship with their motherland in these difficult times”.
He highlighted that “the main responsibility is not limited to financing the government but to rather setting growth policies with regards to credit and support operations”. He also confirmed that “Lebanon is not on the verge of bankruptcy and has what it takes to overcome this crisis should a true and drastic reform operation be implemented provided it does not tackle salaries but rather focuses on economic expansion”.