Fitch: Lebanon banks to negative

Fitch Ratings said it revised the outlooks on Bank Audi and Byblos Bank's long-term issuer default ratings to negative from stable.

The agency affirmed the banks' long-term issuer default ratings and viability ratings at B.

Fitch said the outlook revision reflects the Dec. 19 revision of Lebanon's rating outlook to negative.

The negative outlook on Lebanon reflects heightened political risk with the involvement of Hezbollah and Sunni groups in the neighboring Syrian conflict increasing sectarian tensions domestically. Violence in Lebanon, though still sporadic, has intensified in recent months.

The ever-rising number of refugees also adds to tensions and strains, especially on infrastructure and public institutions. In the absence of agreement on the composition of a new government, political life has been paralyzed since March 2013, and presidential elections in 2014 add to political uncertainty.

It also reflects the country's weak growth prospects, with loss of confidence induced by spill overs from the Syrian conflict taking a heavy toll on economic performance.

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