Here's an odd thing: profits at Syrian banks grew last year

This seems strange. Syria's economy is failing badly, yet the country's banks increased their profits in 2011, according to their results filed with the Damascus stock exchange. Here's a chart showing total pre-tax profits at the 12 banks listed on the stock market for the past three years (the figures are in Syrian pounds):

Graph showing Syrian bank profits

There are a few possible explanations for this. The gap between lending and deposit rates is rising which provides one opportunity for greater profits. Given that some deposits are held in dollars, there might also be an exchange rate effect, with banks exploiting the opportunities that come about through the depreciation of the Syrian pound.

Lastly, the Syrian government is probably borrowing heavily from its domestic banks to help cover a widening fiscal deficit and may be paying high interest rates.

It's not an across-the-board increase. Some did better, some did worse. It still seems counter-intuitive though. I'll be taking a look at the quarterly / half yearly results of the banks at some point, to see if they've been able to continue swimming against the tide this year too.