2016 Outlook: Banks in the Levant

...Negative Rating Outlook: Fitch Ratings has a Negative Outlook on nearly half of its rated banks in Levant countries (Egypt, Jordan and Lebanon) with all others on a Stable Outlook. The Negative Outlooks are largely attached to Lebanese banks and reflect the Negative Outlook on the sovereign. Jordan's Arab Bank also has a Negative Outlook, although this only partially reflects its domicile. The Stable Outlooks mostly reflect Fitch's expectations of stable creditworthiness of the Egyptian (rated) and Jordanian (not rated) sovereigns. Stable Sector Outlook: The sector outlook is stable for all three countries as Fitch expects the banks' financial metrics to remain largely unchanged in stable, albeit very challenging, operating environments. Very High Exposure to Country: High-yielding government debt accounts for a large part of banks' balance sheets and profits in Egypt and Lebanon, where customer deposits are channelled through the banks into government bonds. This adds to these banks' concentration...

Outlook