Ongoing political unrest and the government’s weak creditworthiness has led rating agency Moody’s to downgrade three of Lebanon’s largest banks to junk status.
Moody’s has relegated the local currency deposit ratings of Bank Audi, Blom Bank and Byblos Bank to Caa2 from Caa1.
Moody’s also downgraded the banks’ foreign currency deposit ratings to Caa3 from Caa1.
The move follows Moody’s decision to cut Lebanon’s country rating earlier to junk status this month.
“The Lebanese government’s weakening creditworthiness given their large exposure to the Lebanese sovereign, which is their main source of risk,” stated Moody’s. “In addition, the three banks continue to be exposed to the challenging Lebanese operating environment.”
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