Blom Bank's ratings affirmed

Blom Bank, in common with the other Lebanese banks, demonstrated a good degree of resilience during the global financial crisis reflecting a well supervised banking system and aided by Lebanon's strong economic expansion. The Bank succeeded in growing operating and net profit in the year under review assisted by the contribution to gross income from its overseas operations. Returns achieved were better than the peer group average in part due to provision write-backs. The Bank's loan quality is sound as evidenced by the lower than sector average non-performing loan (NPL) ratio. While provision coverage for NPLs is satisfactory, higher provisioning levels would provide a stronger buffer against potential new problem loans.

Blom Bank's balance sheet is satisfactorily capitalised (following the formal adoption of the Basel II framework in 2009) although CI considers a higher capital adequacy ratio prudent in view of Lebanon's historically volatile operating environment. The Bank continued to maintain a comfortable level of liquidity, notwithstanding the further reduction in bank placements abroad, reflecting its deep and steadily growing pool of customer deposits. However, a considerable proportion of BLOM Bank's liquid assets remained invested in Lebanese government paper as is the case with peer banks. This concentration of assets remains a cause for some concern given the size of the state's debt burden and the lack of real progress on economic reform. That said, Lebanon currently faces reduced near-term refinancing risks reflecting its improved international liquidity position.

Blom Bank is a universal bank offering corporate and retail banking services. Its retail banking operation is among the largest in Lebanon reflecting its substantial retail customer deposit base and nationwide branch network. Through its Lebanese subsidiary Blominvest Bank, the Bank also provides private banking, investment banking and asset management services.

The international business is conducted through its subsidiary banks namely Blom Bank France and its branches in Paris, London, Dubai, Sharjah, Cyprus and Romania, and Blom Bank Switzerland. The decision in 2004 to expand in nearby MENA countries (namely Syria, Egypt and Jordan) has further diversified risk assets and revenue streams.