Bank AudiBank Audi

BLOM BankBLOM Bank

Byblos BankByblos Bank

Bank of BeirutBank of Beirut

Byblos BankByblos Bank

The change in the outlooks was triggered by the recent rating action taken by Moody's Sovereign Risk Unit that changed the outlook on both the FC deposit ceiling and the FC debt ceiling of Lebanon to stable from negative. "Lebanese banks continue to be heavily exposed to the sovereign, although to a lower degree than in the past. However, their deposit and debt ratings have been constrained by the respective country ceilings, and as a result any sovereign rating action has an impact on the bank ratings as well," explains Nondas Nicolaides, Assistant Vice President -- Analyst for Lebanese banks.

The rated Lebanese banks continue to perform well with a growing deposit base enabling them to invest in the highly profitable Lebanese government securities, although this also raises their risk profiles considering the low ratings of Lebanon. Any improvements in the currently fragile political situation in the country that could have a positive impact on Lebanon's ratings would also prove beneficial for the banks' ratings.

Furthermore, banks with significant franchises outside Lebanon and with an increasingly higher level of earnings from their international operations, are likely to benefit more from any future improvement in Lebanon's ratings and may also see positive pressure on their standalone ratings. For the time being, however, the still heavy earnings reliance on low rated (B3) Lebanese sovereign debt and their overall sovereign exposure relative to their equity constrains any rating upgrades, Moody's concludes.

Bank AudiBank Audi is headquartered in Beirut and had total assets of LBP26,001 billion (US$17.2 billion) at the end of December 2007.

BLOM BankBLOM Bank is headquartered in Beirut and had total assets of LBP25,073 billion (US$16.6 billion) at the end of December 2007.

Byblos BankByblos Bank is headquartered in Beirut and had total assets of LBP14,320 billion (US$9.5 billion) at the end of December 2007.

Bank of BeirutBank of Beirut is headquartered in Beirut and had total assets of LBP7,952 billion (US$5.3 billion) at the end of December 2007.

-Ends-

Limassol
Mardig Haladjian
General Manager
Financial Institutions Group
Moody's Investors Service Cyprus Limited
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Limassol
Nondas Nicolaides
Asst Vice President - Analyst
Financial Institutions Group
Moody's Investors Service Cyprus Limited
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Copyright 2008, Moody's Investors Service, Inc. and/or its licensors and affiliates including Moody's Assurance Company, Inc. (together, "MOODY'S"). All rights reserved.

© Press Release 2008 from Moody's Investors Service

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