Moody's announced an upgrade on the financial strength of the three Lebanese Banks. The banks include BLOM Bank, Bank Audi, and Byblos Bank. Moody's has changed its outlook to stable from negative. The report stated, however, that deposit and debt ratings of these banks remain unaffected by this action. In March 2005 Moody's had downgraded all three banks' financial strength ratings to D from D+ following Lebanon's sovereign downgrade from B2 to B3. Lebanon's political turmoil, following Prime Minister Rafiq Hariri's assassination and the adverse effect on the economy triggered the downward ratings revision.
Moody's said that the Banque du Liban's effective monetary policy, the resilience shown by the banking system in the face of political turmoil, the three banks' strong core liquidity, and improved 2005 performance were reasons that led to improvement in the outlook. Moody's also cautioned that these banks continue to be heavily exposed to a low-rated sovereign by having invested in government securities and Certificates of Deposits issued by Lebanon's central bank. However, the diversification of the banks's operations to other countries in the Middle East & North Africa region would gradually loosen their interdependent relationship with the Lebanese government.