In another signal that the Israeli economy is falling further into the abyss, Moody’s has cut the ratings of 4 Israeli banks. Interesting to note that Bank Mizrahi Tefahot did not get cut, as they continue to implement their conservative business model, which has kept them both profitable and out of much of the financial crisis.

According to Globes: “International ratings company Moody’s has cut its ratings for four Israeli banks: Bank Leumi (TASE: LUMI), Bank Hapoalim (LSE: BKHD; TASE: POLI), First International Bank of Israel (TASE: FTIN1;FTIN5), and Israel Discount Bank (TASE: DSCT). Moody’s has downgraded the long-term local currency deposit rating of Bank Leumi to A1 from Aa3. The Baseline Credit Assessment (BCA) was lowered to Baa1 from A3 and the bank financial strength rating (BFSR) was downgraded to C- from C. The bank’s A1 long-term foreign currency deposit rating and Prime-1 short-term deposit ratings were affirmed. The outlook on both the long-term local and foreign currency deposit ratings and on the BCA is negative, while the outlook on BFSR is stable.”

The resons cited for the downgrades were familiar. A slowing economy, bank exposure to construction and tourism which are both in trouble and lower profitability.

Let’s see if PM elect Benjamin Netanyahu, can turn things around quickly so that Israel can get a credit upgrade.

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