Lebanese bankers are confident that the country's banking sector will come out of the crisis precipitated by Israel's month long military campaign against Hezbollah.

Letter of credit (L/C) business meanwhile has taken a hit along with other banking services, but cross-border business written by Lebanese banks and businesses using trade finance services is resilient say local bankers.

Situations stable

The respected Daily Star newspaper canvassed four banks and reports that the conversion of local to hard currency and capital flight that occurred during the first fortnight of the conflict has slowed to a trickle and the Lebanese pound remains stable.

The impact of the capital flight has been offset by a Saudi-Kuwaiti infusion of US$1.5 billion, which analysts say is equivalent to the portion of the banking sector's total deposits converted to hard currency.

Easy return

Deputy general manager of the Bank of Beirut and Arab Countries (BBAC), Saad Andary, is confident that pre-conflict trading and banking patterns will be re-established.

"Already many letters of credit opened to import goods to Lebanon have been diverted to Cyprus and most merchants are currently selling goods outside Lebanon," he told the Daily Star.

"We can easily attract funds back to Lebanon when the crisis ends," he said.

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