Strong market position and domestic banking franchise Large international presence with indigenous deposit gathering capabilities Sound funding profile and good liquidity Diversified sources of income Likely government support if needed Vulnerable asset quality Weakened short-term earnings prospects Still risky operating environment, with an expected continued economic slowdown Tight core capitalization Divestment of some operations resulting in some lost opportunities for recurring revenues Mature domestic market limit domestic growth prospects The ratings on Israel-based Bank Leumi le-Israel B.M. (Leumi) are based on our view of its strong market position and domestic banking franchise, sound funding profile, and good liquidity. The ratings are constrained by its vulnerable loan quality due to the economic downturn and its impact on domestic borrowers, in particular
