After lowering Israel’s credit rating, the international rating agency Moody’s lowered the deposit rating of the five major Israeli banks – Bank Leumi (TASE:LIGHT), Hapoalim Bank (TASE: POLITE), Israel Discount Bank (TASE: DSCT), Mizrahi Tefahot Bank And Israel’s first international bank (TASE:FTIN1; FTIN5). The rating drop is technical rather than automatic because in the event of a crisis, the banks would be supported by the State. Therefore, if the country’s credit rating were downgraded, it would be less able to support the banks. The banks’ rating was downgraded from A2 to A3.
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Israeli rating agency Midroog says the rating downgrade could extend beyond banks and affect government companies like Israel Electric Corp. Moody’s announcement talks about the rating of long-term deposits, that is to say the rating of the senior debt of the bank, so in fact it is about the rating of the entire bank. Moody’s also gave a negative outlook to banks.
Moty Citrin, vice president and head of financial institutions at Midroog, said: “Moody’s left the banks’ strong internal financial rating (BCA) unchanged at Baa2 and highlighted their financial strength, capital adequacy and high profitability. The only thing that has changed from Moody’s. This point of view is the assessment of the state’s capacity to support the banks.
He adds: “From Midroog’s point of view, nothing has changed either. Banks remain strong and stable, with a positive financial profile, record profitability and significant cushions to absorb losses in a variety of extreme scenarios. Therefore, Midroog does not plan any changes. significant liquidity risk for the banking system, even in the current scenario of ongoing fighting, given a large stock of liquid assets and a relatively stable source structure, which is based on a substantial component of retail deposits , which have demonstrated great stability during previous crises.
Published by Globes, Israel Business News – fr.globes.co.il – February 13, 2024.
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