The ratings on Israel-based Bank Leumi le-Israel B.M. (Leumi) are based on its strong domestic banking franchise and high liquidity. The ratings are constrained by its vulnerable, 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. The ratings benefit from a one-notch uplift from expected government support in the event of a financial or systemic crisis, as Standard&Poor's Ratings Services perceives Leumi to be a systemically important bank. Given Leumi's significant market share, its risk profile will be largely influenced by its operating environment, which is characterized by a prosperous,
