BEIRUT: Bank of Beirut – one of the leading banks in Lebanon – asked Moody’s to drop its rating, because like many banks it believes there is no added value in these ratings, sources told The Daily Star Thursday.

“I am not surprised by Bank of Beirut’s decision because there is a general feeling that some of the rating agencies are insisting on connecting the Lebanese banks to the sovereign risks of the country,” one source, who spoke on condition of anonymity, said.

Rating agencies have customarily linked the rating of Lebanese banks to the sovereign rating of the country as a whole. Lebanon has huge debt – mostly residing in the commercial banks and Banque du Liban.

Banks argue that their exposure to the public debt – which now stands at $54 billion – is gradually falling as Lebanese banks are reluctant to lend more money to the government.

But banks are still rolling over the maturing bonds and Eurobonds whose yields have dropped considerably over the past few years.

Furthermore, Moody’s and other rating agencies expressed deep concern at the possible negative impact of the volatile events in Syria on Lebanon.

There are seven Lebanese banks that operate in Syria, lenders which are currently under the microscope of the rating agencies.

However, Bank of Beirut assured The Daily Star that most of it investments outside Lebanon are in AAA-rated countries, such as Australia, Britain and the UAE.

“Bank of Beirut is keen to diversify its revenues to reduce dependence on the Lebanese market, which still represents the main platform of operation for this bank,” the source told the paper.

He added that Bank of Beirut hopes that in the next five years 65 percent of their revenues and profits will come from Australia.

In March 2011, Bank of Beirut announced the acquisition of Australian Bank Laiki for $420 million.

Chairman and general manager of Bank of Beirut Salim Sfeir said the acquisition of the Australian bank was a major step for the Bank of Beirut, adding that the negotiations to buy the bank had not been easy.

“We literally negotiated for 16 months with the bank and the Central Bank of Australia and we produced all the documents to the authorities to show that we are capable of managing the bank,” Sfeir said.

He stressed that huge sums went into the acquisition – in what is considered the largest banking investment outside Lebanon – an amount that surpassed $420 million.

The new bank is now called Beirut Hellenic Bank – Australia.

Sfeir said that the bank, with nearly $1 billion in assets and 10 branches in Australia, would offer all sorts of banking services to the large Lebanese community in Australia. The bank plans to open eight more branches in Australia over the next three years.

Moody’s announced earlier that it has withdrawn Bank of Beirut’s D- standalone bank financial strength rating, which maps Ba3 on the long-term scale, and Not-Prime short-term local-currency deposit ratings.

Moody’s has also withdrawn the bank’s B1 long-term and Not-Prime short-term foreign currency deposit ratings, and the Aa2.lb long-term and LB-1 short-term national scale ratings.

But Moody’s did not hint that Bank of Beirut had asked the rating agency to withdraw the rating.

Bank of Beirut reported consolidated unaudited total assets of LBP14.7 trillion ($9.7 billion) as of December last year.

Moody’s still assesses the ratings of three other major banks listed on Beirut Stock Exchange: BLOM, Audi and Byblos banks.