Strong domestic banking franchise and liquidity; and International banking network, which diversifies the risks of domestic operation. High, albeit improving, economic risk in domestic market; Weak, but improving, asset quality by international comparison; Tight capitalization given risky environment and concentrations. The ratings on Israel-based Bank Leumi le-Israel B.M. (Leumi) are based on its strong domestic banking franchise and strong liquid financial profile. The ratings are constrained by its weak, but improving, asset quality and tight capitalization within a risky operating environment, primarily the Israeli economy, which is concentrated and vulnerable to shocks; and the impact that this has on the bank's business prospects and financial performance. Given Leumi's significant market share, its risk profile and operating performance directly reflect the
