Fitch affirms Bank Audi's stable outlook |
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BEIRUT - Fitch Ratings has affirmed Lebanon-based Bank AudiBank Audi
ratings at Long-term Issuer Default (IDR) 'B-' with Stable Outlook, Short-term IDR 'B', Individual 'D' and Support '5'.The ratings reflect, and are constrained by, the ongoing weaknesses of the Lebanese operating environment and AudiAudi
's substantial exposure to the sovereign. The Individual Rating reflects AudiAudi's strong franchise, competent management and resilient profitability. It also reflects Lebanon's ongoing political risks, although these have receded somewhat following the peaceful elections held in June 2009. The bank's Support Rating reflect Fitch's view that the Lebanese authorities would certainly try to support AudiAudi if needed given its systemic importance; however, a low sovereign rating ('B-'/Outlook Stable) means the ability to provide such support cannot be relied upon.Lebanese banks have so far shown great resilience to the effects of the slowdown in the MENA region and AudiAudi
continued to record solid profit growth in 2008 with net profit increasing by 19 percent. Core banking revenue benefited from a revival of economic growth in Lebanon and from growth - at least during the first nine months of the year - in the wider MENA region. AudiAudi's Q109 profit continued to grow, although at a slower rate, with net profit increasing 12 percent YOY.AudiAudi
has a strong funding franchise and non-equity funding consists almost entirely of customer deposits. Lebanon accounts for about three-quarters of the bank's deposit base with most of the remainder from the wider Mena region. Deposits increased 22 percent in 2008, well above the sector average of about 16 percent, with AudiAudi benefiting from a flight to quality effect.
© The Saudi Gazette 2009
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