Lebanon’s banks to close ‘indefinitely’ after heists by angry depositors

Lebanon’s banks will remain closed “indefinitely” following a spate of armed robberies by angry depositors desperate to gain access to their savings.

The beleaguered country’s banking association said on Thursday that banks would stay shut “in the absence of assurances” about security from the state. The grouping, which represent most banks, cited “the continued risks to bank employees and customers inside branches, and in light of the ongoing atmosphere of incitement”.

Banks shut their doors to customers after a spree of heists at seven bank branches last week as the nation’s three-year financial crisis deepens and the situation for many Lebanese becomes increasingly dire.

The banking sector has frozen deposits for more than two years and put limits on how much money people can withdraw, at a time when three-quarters of the population has been plunged into poverty.

Many Lebanese blame the financial sector and the central bank for the crisis, and in August a man drew widespread attention and public support after he held up a Federal Bank branch and walked out with $35,000 of his own money. He was not charged with a crime.

In what appeared to be copycat incidents, other disgruntled customers stormed branches last week in seven separate incidents, wielding handguns, replica and pellet guns, demanding that tellers hand over their deposits. Some were successful, and handed over bags of cash to family before being taken into custody or going into hiding. Others were arrested.

Five of the robberies were on Friday, after which banks announced they would close for three days as they called on the government to beef up security at branches. They were due to open on Thursday.

Authorities, bank owners and employees have condemned the hold-ups. But activists and depositors argued that banks and shareholders have profited from the crisis, and are prioritising the banks over their clients, who have lost their savings.

Last month, the World Bank published a report accusing Lebanon’s authorities of operating a giant Ponzi scheme that had caused “unprecedented social and economic pain”.

The report said public finances were used to capture the state’s resources for political patronage, creating a “deliberate” depression, adding that a significant portion of people’s savings had been “misused and misspent over the past 30 years”.

Despite the worsening crisis, Lebanon’s fractious political parties have still not agreed to form a government four months after parliamentary elections. Beirut has been holding talks with the IMF over a $3bn rescue package. A preliminary agreement was reached in April, but the process has made little progress since.

The IMF said on Thursday that the Mediterranean nation’s economy remains “severely depressed against continued deadlock over much-needed economic reforms and high uncertainty”.

“Despite the urgency for action to address Lebanon’s deep economic and social crisis, progress in implementing the reforms agreed under the April [staff level agreement] remains very slow,” the fund said after a staff visit to Beirut. “In particular, the majority of prior actions have not been implemented.”