Fitch affirms Bank Leumi

Fitch Ratings said it affirmed Israel-based Bank Leumi's issuer default rating at BBB+, short-term rating at F2, individual rating at C and support rating at 2.

The outlook is stable.

The agency said the ratings reflect Leumi's status as one of Israel's largest banks, its stable retail deposit base and improving profitability and capitalization.

The ratings also take into consideration the low levels of capital by international standards, lending concentrations and the high levels of unreserved non-performing loans, Fitch added.

Fitch said the bank's operating environment remains supportive and that the conflict in Lebanon has dented, but not reversed, the positive progress seen in recent years. Nonetheless, the operating environment presents many ongoing challenges, such as a highly concentrated economy and the fact that the corporate sector is increasingly raising debt on the capital market rather than through bank loans, which has inhibited loan growth.

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