IIRA Assigns Fiduciary Ratings to AlBaraka Bank Lebanon S.A.L

Manama, April 18, 2016- Islamic International Rating Agency (IIRA) has assigned investment grade, national scale ratings of BBB-(lb)/A3(lb) (Triple B Minus / A Three) to AlBaraka Bank Lebanon S.A.L ('ABBL' or 'the bank'). Outlook on the assigned ratings is 'Stable'. The fiduciary score has been assessed in the range of '71-75', reflecting adequate fiduciary standards wherein rights of various stakeholders are adequately protected.

ABBL was incorporated in 1992 as the first Islamic bank operating in the Republic of Lebanon (Lebanon or 'the country'), and is as yet the most significant franchise within the Islamic banking sector. Owned almost wholly by the Al Baraka Banking Group (ABG), ABBL benefits from the group's multi-jurisdictional presence, strong franchise and potential equity or funding support, if and when needed.

Operating in a challenging economic environment ABBL has sought to diversify its financings outside Lebanon, thereby mitigating the effects of the slowdown in the Lebanese economy. Owing to the market dynamics and management caution, ABBL maintains a highly liquid asset profile.

By and large, asset quality has improved over the last few years. Moreover provisions and collateral maintained by the bank provide good level of coverage. Though capitalization levels remain above the regulatory requirement, ABBL will benefit from reinforced levels of capital to support future growth and compete for a larger share in the market.

Corporate governance practices at the bank benefit from a strong regulatory environment and are considered to be effective. Strengthening of control related functions including risk management would benefit the bank. Shari'a governance framework of the bank merits appreciation, being driven by relatively high conformance to best practices in products and service structures, vis-à-vis peer banks, and as derived from a group-wide commitment to Shari'a Compliance.

For further information on this rating announcement, please contact the undersigned at sabeen.saleem@iirating.com

Sabeen Saleem, CFA
Chief Executive Officer