Arab Today, arab today moody’s lebanon’s banking outlook remains negative
Last Updated : GMT 15:49:23
Arab Today, arab today
Arab Today, arab today

Moody’s: Lebanon’s banking outlook remains negative

Arab Today, arab today

Arab Today, arab today Moody’s: Lebanon’s banking outlook remains negative

Beirut - Arabstoday

The outlook for Lebanon’s banking system remains negative, Moody’s Investors Service said in a new Banking System Outlook published Wednesday. It added that the main drivers of the outlook are the expectations of weak economic growth and business sentiment in both 2012 and 2013. This weakness is blamed on escalating political unrest and an acceleration in the formation of problem loans related to lending in the domestic market and in countries undergoing political transition or economic slowdown. Declining net profitability, primarily resulting from higher provisioning needs and subdued fee-generation, was also cited. “The operating environment for banks will remain challenging over the 12-18 month outlook period due to weak growth, the poor performance of sectors key to banks’ asset quality and the factious domestic politics,” the report said. Moody’s estimates that real GDP growth will be around 2.0 percent in 2012 and 2.5 percent in 2013, below the 8.1 percent average from 2007. In Moody’s view, the weak growth outlook is underpinned by the precarious security situation in neighboring Syria given the political and economic links, which affect Lebanon’s business sentiment and economic performance. “Moreover, downside risks to growth have increased further following the escalating political unrest domestically, particularly in the aftermath of the recent assassination of Lebanon’s internal security chief Wissam al-Hassan,” Moody’s argued. Moody’s believes that the volatile security situation will affect the performance of key sectors such as trade, tourism, real estate and construction, and that the government’s fiscal position will remain weak, restricting its capacity to provide fiscal stimulus. “This will be exacerbated by factious politics, which will continue to hinder the government’s capacity to enact economic policy or to implement delayed reforms. As a result, Moody’s expects that the banking sector will register weak nominal credit growth and continue to finance the government deficit,” the report said. Moody’s believes that asset quality will remain under pressure. “Problem-loan formation will accelerate, with non-performing loans (NPLs) rising above 6.5 percent of gross loans (from 4 percent at year-end 2011), due to adverse socio-political events, weaker domestic market conditions, as well as banks’ regional exposures (primarily via their Egyptian, Syrian and Jordanian operations),” Moody’s said. It added that Lebanese banks’ high exposure to Lebanese sovereign risk will remain a major source of credit risk over the outlook period, linking the banking system’s health directly to the B1-rated sovereign credit risk. Moody’s expects system-wide profitability to weaken over the coming 18 months owing to higher credit costs, lower fee income generation and lower contribution from the banks’ Syrian operations. As problem loans mount, the rating agency estimates that increases in credit charges to maintain current provisioning coverage will likely erode approximately a quarter of rated banks’ aggregate pre-provision income. Accordingly, Moody’s expects low returns on equity and weak profitability to remain features of the system over the outlook period. From DailyStar

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today moody’s lebanon’s banking outlook remains negative Arab Today, arab today moody’s lebanon’s banking outlook remains negative

 



Arab Today, arab today
Arab Today, arab today Fadi explains secrets of  Nancy Ajram's newlook

GMT 18:23 2017 Friday ,24 February

Fadi explains secrets of  Nancy Ajram's newlook
Arab Today, arab today Tourist guide explains types of tourism

GMT 18:28 2017 Saturday ,25 February

Tourist guide explains types of tourism
Arab Today, arab today Expresses Algerian history by woody figures

GMT 13:26 2017 Friday ,24 February

Expresses Algerian history by woody figures
Arab Today, arab today Iran complying with nuclear deal

GMT 07:14 2017 Saturday ,25 February

Iran complying with nuclear deal
Arab Today, arab today Ayat Abaza says state TV presented major stars

GMT 03:52 2017 Sunday ,26 February

Ayat Abaza says state TV presented major stars
View News in Arabic - Business: مصارف
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Reading therapy relieves mental disorders

GMT 15:39 2017 Friday ,24 February

Reading therapy relieves mental disorders
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Penguins in the age of dinos

GMT 11:44 2017 Saturday ,25 February

Penguins in the age of dinos
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today 'Constructive' Vauxhall talk with union

GMT 08:54 2017 Saturday ,25 February

'Constructive' Vauxhall talk with union
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Ola Ghanem hopes to work with M.Ramadan

GMT 07:23 2017 Friday ,24 February

Ola Ghanem hopes to work with M.Ramadan
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage

GMT 06:08 2017 Thursday ,23 February

Actress Lobna Abdel Aziz proud of her career

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 22:42 2017 Thursday ,23 February

Nasima Gamei revives heritage in jewelries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 20:33 2017 Friday ,17 February

To release new antiques collection

GMT 10:20 2017 Thursday ,23 February

Brazil's top diplomat resigns

GMT 11:54 2017 Thursday ,23 February

Saudis await visitors but will they come?

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 20:02 2017 Tuesday ,21 February

Nohan Seyam designs beautiful accessories
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday