Three Paths Under Review
Syria's six state-owned banks are entering a decisive phase after a detailed assessment by international consultancy Oliver Wyman laid out three possible reform paths for the public banking sector. The review stems from a memorandum of understanding signed by the Syrian Ministry of Finance, the Qatar Development Fund, and Oliver Wyman, with backing from international parties that include the World Bank and the United States Treasury.
The first option calls for restructuring the state banks under continued public ownership with new management. The second opens the door to outright privatization through acquisition by foreign banks. The third pursues strategic partnerships with Arab and other foreign institutions to bring in capital and expertise without surrendering control.
A Lopsided Capital Base
The figures behind the review expose a stark imbalance. The six government banks share a combined authorized capital of 134 billion old Syrian pounds (SYP) — equivalent to roughly $19 million — with 126.5 billion old pounds actually paid in. Private banks, by contrast, held aggregate equity of roughly 8.7 trillion old pounds, about $795 million, at the close of the fourth quarter of 2025.
That gap underscores why the state sector has lost the capacity to support large-scale lending, while private institutions have absorbed market share. The minimum capital requirement for a traditional bank now stands at 10 billion old Syrian pounds.
Structural Weaknesses Acknowledged
The assessment flags a cluster of problems eroding the state banks' viability. Inflation has cut the real value of capital, while non-performing loans continue to mount on their books. Technology platforms remain outdated, international accounting standards are largely absent, and lending decisions have been distorted by direct government instructions.
Customer confidence has also suffered, weakened by repeated curbs on withdrawals and high transaction fees. Restoring trust, the review suggests, is as central to reform as recapitalization.
Privatization's Social Cost
Economic and banking expert Dr. Ibrahim Nafi Qawshji cautioned that the privatization path could prove the most disruptive option. He warned it would risk "large-scale layoffs and service cost increases" with knock-on effects on household finances and public confidence.
Restructuring under continued state ownership would carry, in his view, fewer social risks while still allowing a managerial overhaul. The final choice now rests with Syrian authorities, who must weigh financial-sector competitiveness against employment and access concerns.