January 6, 2020 / 7:46 PM / 21 days ago

Lebanon bank units in Jordan only 'marginally impacted' by crisis at home

AMMAN, Jan 6 (Reuters) - Jordan’s Central Bank said on Monday the subsidiaries of two major Lebanese banks operating in the kingdom were financially sound and were only “marginally impacted” by a deepening economic crisis that has hit the Lebanese banking system.

In a statement on state media, the Central Bank said there were no “material risks over the safety of depositors’ money” held by the Jordan subsidiaries of Bank Audi and Blom Bank.

Jordanian banks had also only been marginally affected by the fallout from the crisis in Lebanon where weeks of protests had forced Lebanon’s banks to place controls on dollar withdrawals to prevent a run.

A senior monetary official said the two Lebanese banks that operate an extensive network of branches in Jordan were like other foreign bank units operating in the kingdom that are governed by Central Bank regulations.

“They are not allowed in the first place to have a position with their headquarters, so that limits any exposure,” the official, who requested anonymity, said.

Lebanon’s long-brewing economic crisis is the worst since its 1975-90 civil war. The banks are seeking to prevent capital flight.

Two Jordanian bankers however said fears over a fallout from the crisis had prompted some local depositors to withdraw some funds from the two Lebanese banks’ units.

It was not clear how much was withdrawn but it did not pose a serious problem for liquidity, said one banker, who did not elaborate.

Heavily indebted Lebanon won pledges of over $11 billion at a conference in 2018, conditional on reforms that it has failed to implement. The protests that erupted on Oct. 17 are fuelled by years of corruption and waste. (Reporting by Suleiman Al-Khalidi; editing by Nick Macfie)

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