S&P upgrades Bankmed’s outlook to stable

The Lebanese economy continues to show resilience facing the political and economic challenges brought in by the regional and domestic developments. Though significantly below potential, the real average growth rate of about 2% recorded over the last five years since the war in Syria erupted, is in fact a vote of confidence in the ability of the Lebanese private sector to weather the challenging external environment.

 

This resilience is also due to the Lebanese banking sector that continues to play a pivotal role in supporting Lebanon’s economic growth given its large size, high liquidity, solid capital adequacy, and the rigorous and stringent regulatory framework implemented by the Central Bank of Lebanon (BDL). Indeed, a recent successful financial operation by BDL allowed total gross foreign reserves (including gold) to reach a record USD 52.8 billion by Mid-September 2016. This high level of reserves represents a coverage of 25 months of imports. It also covers 182% of foreign-currency denominated debt.

 

As a result, the credit rating agency Standard & Poor’s (S&P) revised Lebanon’s outlook from “negative” to “stable” citing the robust funding capacity provided by the deposits of Lebanese banks and its ability to support the government’s financing needs. The Lebanese banks rated by S&P, among which Bankmed, were also upgraded along with the Sovereign rating.

 

Bankmed has indeed been cruising on a path of solid growth and expansion, and the rating upgrade underlines the validity of the strategy that it has been following. The results of the first half of 2016 confirm the upward trend of the last decade. Net Profit reached USD 77.1 million in the first half of 2016 an increase over the figure recorded in the same period last year. With regard to Bankmed’s financial position for the first half of 2016, the Bank’s Total Assets stood at USD 15.9 billion as at end-June 2016, while Loans reached USD 5.4 billion, posting a 5% increase in six months.

 

The growth of the Bank in terms of lending did not compromise its solid capitalization nor its liquidity position as shown by the strong ratios achieved on these counts. Bankmed recorded a capital adequacy ratio of 15% exceeding the BDL and Basel III regulatory requirements of 12%. With regard to liquidity, Bankmed posted a foreign currency liquidity ratio of 29.6% far surpassing BDL’s requirement of 10%.

 

 

 

 

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