Cyprus & World News

Lebanese banks "could help" Cyprus economic recovery

15 February, 2014

Central Bank of Cyprus Governor Panicos Demetriades has said that Lebanese banks could help the island's economic recovery.

Demetriades was speaking during a joint press conference with the Governor of the Central Bank of Lebanon Riad Salameh following the first meeting of the Cypriot–Lebanese banking authorities and associations held in Limassol.

The purpose of the meeting was to start a dialogue between the two banking systems with the aim of strengthening relations.

The two centralbankers also discussed regulatory issues relating to cooperation between the two bodies, measures to strengthen anti-money laundering, and the restrictive measures imposed by the Cypriot authorities.

Responding to questions, Riad Salameh expressed the belief that “there is room for expansion for Lebanese banks in Cyprus and we do encourage that”.

He said that “the Lebanese banks enjoy today high and free liquidity and they have good capital adequacy so there is possibility to expand outside Lebanon”.

As he said, "Lebanon today is a country that has developed a strong banking sector that enjoys deposits that represent more that 3 times the GDP of Lebanon".

“We believe that as Cyprus is getting back progressively to normality the rating issues could be handled in a way that they do not obstruct the banking relations between the two countries”, he added.

On his part, Panicos Demetriades expressed the belief that that “the current crisis offers new opportunities for strengthening and furthering the links between the two banking systems”.

“There are opportunities relating to the strength of the Lebanese banking system which could benefit Cypriot banks in the form of helping to support trade finance that has been a problem in recent months for Cypriot companies”, he added.

He noted that “the Lebanese banks could help to reactivate the Cypriot economy and economic recovery of Cyprus”.

Demetriades said, “there is a willingness of behalf of Lebanon to help Cyprus at this difficult juncture as there has been in the past willingness of Cyprus to help Lebanon when Lebanon was in difficulty.”

Speaking at the press conference, the Chairman of the Association of Banks in Lebanon Dr. Bassil said that “we owe too much to Cyprus as Lebanese, we have an obligation to Cyprus to help them in financing and bringing investment opportunities and our customers who want to make investments”.

“We are ready to support case by case our friends bankers and collaborate with them for their need for letter of credit and letter of guarantees” he said, adding that Lebanese banks have 9 branches in Cyprus and 4 affiliated banks.