The new governor of Lebanon's central bank has called on all banks to inject fresh capital, urging those unable to do so to merge with other banks or face license revocation to maintain stability in the banking system, An-Nahar reported on April 9.

This announcement coincides with the presentation of the bank restructuring law by the finance minister to the government for subsequent referral to parliament, prompting analysis of the Lebanese banking sector's structure and capabilities.

Lebanese banks are currently classified into four distinct groups based on their individual capabilities and potential, according to banking expert Imad Judiyeh.

The first group comprises banks that established the banking sector and enhanced its services, including Fransabank, BLOM Bank, Lebanese French Bank, Lebanese Credit Bank, Byblos Bank, Mediterranean Bank, and Bank Audi with its distinguished banking heritage.

The second group includes medium-sized banks whose managers have successfully implemented modern banking practices and provided various banking services, such as Lebanese Commercial Bank, First National Bank, and Bank al-Mawarid.

The third group consists of banks that have stopped growing for more than twenty years, whether in terms of deposit size, total capital, or quality of services provided to customers.

The fourth group includes banks half of which ceased operations during the crisis, while the remaining half can only be described as banks by name, which the new governor has indicated should be merged or delisted.

"Finding a solution for repaying bank sector deposits and injecting new money will lead to sorting between viable banks capable of continuity and operation, and those that will be merged or removed from the banking list. This will result in about twenty institutions that will rebuild the sector," Judiyeh wrote.

The implementation of the bank restructuring law will involve studying the situation of each bank to determine the losses that must be covered with fresh funds to create balance between assets and liabilities in their annual budgets.

The governor's reference to injecting new money into the sector aims to strengthen banks' capital after it eroded due to exchange rate deterioration during the previous crisis, enabling them to restore operational capabilities and rebuild trust with customers.