Global Arab Network | Lebanon: Bank Audi Ratings Affirmed with Stable Outlook

Translate this article to your language:

GANPublications

e-Publications

Add Site to Favorites

Add Page to Favorites

Make Homepage

Share This Page

RSS Feed

--------------------------------------------------------------------------------------------------------------------
| |

Lebanon: Bank Audi Ratings Affirmed with Stable Outlook

Global Arab Network - - Ayman Khalil

Friday, 13 May 2011 14:48

CI Bank Audi Ratings Affirmed with Stable Outlook

Global Arab Network - Capital Intelligence has announced today that it has affirmed Bank Audi sal – Audi Saradar Group (Audi)’s Long-Term and Short-Term Foreign Currency Ratings of B and B respectively. These ratings are set at CI’s sovereign ratings for Lebanon. CI also affirmed the Bank’s Financial Strength Rating (FSR) of BBB-. Given the high likelihood of support from the authorities in case of need the Support Level is 3. The Outlook for all the ratings is ‘Stable’, Global Arab Network reports according to a press statement.

Bank Audi is the largest bank by all measures in the Lebanese banking system. The business franchise continues to benefit from regional (MENA) expansion bringing diversification to risk assets and revenue streams. The quality of the credit portfolio is satisfactory notwithstanding an increase in non-performing loans (NPLs) and decline in loan-loss reserve coverage. Although NPLs in the MENA region are projected to rise amid the regional ongoing political unrest, they are expected to remain at manageable levels. Audi’s sound operating profitability continues to underpin its capacity to set aside provisions as necessary. Despite a moderately higher provision charge in 2010, Audi’s net profit rose further on the back of higher net interest and non-interest income. This performance produced a steady ROAA ratio although returns continued to be modest in common with peer banks. While capital adequacy remained satisfactory and supported by a good rate of internal capital generation, Capital Intelligence (CI) is of the view that a stronger risk asset ratio would provide a buffer in the present uncertain domestic and regional operating environment.

The Bank’s liquidity position was comfortable and funding was sourced largely from customer deposits as was the case with other local banks. Notwithstanding the Bank’s lower than sector average exposure to the Lebanese sovereign, a significant share of liquidity remains invested in domestic government paper and Central Bank CDs. This relative concentration of assets remains a cause for some concern owing to the substantial size of Lebanon’s debt burden and the authorities’ slow progress on economic reform. Total assets at end 2010 amounted to LBP42,972 billion (USD28.5 billion) and total capital was LBP3,649 billion (USD2.42 billion).

Global Arab Network

Add comment

The opinions of the authors in articles published are theirs alone and do not necessarily reflect the views of Global Arab Network
------------------------------------------------------------------------------
Published comments are the opinions of private individuals and do not reflect the views of Global Arab Network