It says something when Lebanon of all places is seen as a beacon of stability in the global credit crisis.

This small country, chronically battered by war, turns out to have a banking sector that has so far been a beacon of stability and growth. Its banks are posting record profits, aided by conservative central bank policies, skillful management and money from Lebanese expatriates.

Lebanon’s very instability — its 15-year civil war and frequent political crises — appears to have bred the banking sector’s fiscal prudence, analysts say.

Three years ago the central bank here barred investments in derivatives and other structured financial products, giving banks virtual immunity to the widening financial contagion. The banks here have done little borrowing on international markets. Deposits account for about 83 percent of their assets, making them among the most liquid in the world.

“The banks here are used to turmoil,” said Nassib Ghobril, the head of economic research and analysis for Byblos Bank, the country’s third largest. “Since the end of the civil war in 1990, there has been no loss of deposits, and there’s great confidence in the sector.”

As of August, the money flowing into deposits grew 16 percent over 2007 — itself a record year. Lebanon had no working government for most of that period, and at times seemed to be on the verge of civil war.

Fascinating.