Research Update: Israeli Bank Leumi ?A/A-1? Ratings Affirmed On Likely Containment Of COVID-19 Impact

While we anticipate that Israeli GDP will contract by 5.5% in 2020 due to the impact of COVID-19, we believe that the domestic economy will rebound fast and recover fully in 2021. We believe that Bank Leumi le-Israel B.M. (Leumi) entered the crisis with strong financials and that it will be able to preserve its profitability to a level that is sufficient to absorb the impact of the pandemic. We acknowledge that Leumi's capitalization is sensitive to market volatility and anticipate that it will confirm the decline in its large pension liability in the second quarter of 2020, contributing to a gradual recovery of its capitalization by 2022. We are therefore affirming our 'A/A-1' ratings on the bank. The stable

...- While we anticipate that Israeli GDP will contract by 5.5% in 2020 due to the impact of COVID-19, we believe that the domestic economy will rebound fast and recover fully in 2021. - We believe that Bank Leumi le-Israel B.M. (Leumi) entered the crisis with strong financials and that it will be able to preserve its profitability to a level that is sufficient to absorb the impact of the pandemic. - We acknowledge that Leumi's capitalization is sensitive to market volatility and anticipate that it will confirm the decline in its large pension liability in the second quarter of 2020, contributing to a gradual recovery of its capitalization by 2022. - We are therefore affirming our 'A/A-1' ratings on the bank. - The stable outlook reflects our view that Leumi will gradually improve its capitalization over the next two years....

Research Update