International ratings agency Standard & Poor’s has upgraded the credit rating outlook of Bankmed and other leading banks in its last report on Lebanon. The agency upgraded the outlook for Bankmed, Bank Audi and BLOM Bank from negative to stable, but kept the banks’ ratings at B-minus.
“Bankmed has indeed been cruising on a path of solid growth and expansion, and the rating upgrade underlines the validity of the strategy that it has been following. The results of the first half of 2016 confirm the upward trend of the last decade. Net profit reached $77.1 million in the first half of 2016 an increase over the figure recorded in the same period last year. With regard to Bankmed’s financial position for the first half of 2016, the bank’s total assets stood at $15.9 billion as at end-June 2016, while loans reached $5.4 billion, posting a 5 percent increase in six months,” S&P said.
Bankmed is among the five leadings banks in Lebanon in terms of assets and customer deposits.
“The growth of the bank in terms of lending did not compromise its solid capitalization nor its liquidity position as shown by the strong ratios achieved on these counts. Bankmed recorded a capital adequacy ratio of 15 percent exceeding the [Central Bank] and Basel III regulatory requirements of 12 percent. With regard to liquidity, Bankmed posted a foreign currency liquidity ratio of 29.6 percent far surpassing [the Central Bank’s] requirement of 10 percent,” the ratings agency said.
S&P stressed that Lebanese banks have helped the local economy to stay resilient despite the difficult economic and political challenges.
“The Lebanese economy continues to show resilience facing the political and economic challenges brought in by the regional and domestic developments. Though significantly below potential, the real average growth rate of about 2 percent recorded over the last five years since the war in Syria erupted, is in fact a vote of confidence in the ability of the Lebanese private sector to weather the challenging external environment,” S&P said.
It added that Lebanese banks continued to finance the local economy thanks to the large liquidity held by the lenders. “This resilience is also due to the Lebanese banking sector that continues to play a pivotal role in supporting Lebanon’s economic growth given its large size, high liquidity, solid capital adequacy, and the rigorous and stringent regulatory framework implemented by the Central Bank of Lebanon,” S&P explained.
The agency also commented on the Central Bank’s major recent financial operation, saying it allowed the bank to increase its FX reserves to a record high of $52.8 billion.
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