Moody's affirms negative outlook for Lebanon's banking system

(MENAFN) Moody's Investors Service announced that it affirmed its negative outlook for Lebanon's banking system due to Syria's ongoing conflict, reported Arabian Business. The rating agency said that the Lebanese economy remains weak and profits of the banking industry are expected to continue to drop as institutions assume higher provisions. Furthermore, the government's weak fiscal position indicates that it will continue to depend on the domestic banking sector to fund its large fiscal gap. It added that the country's banks might be subject to additional asset-quality decline due to the regional instability, falling tourism flows, less consumer confidence, and that reported non-performing loans will grow more than 6.5 percent of gross loans, compared with 4.4 percent in 2011. It is worth noting that at the end of January, Lebanon's public debt grew 8 percent to USD58 billion.