Fitch Ratings has assigned Bank Leumi Le-Israel B.M.'s (Leumi; A/Stable) USD500 million senior unsecured notes a final rating of 'A'.

Leumi's other ratings are unaffected by this rating action.

The final rating is in line with the expected rating that Fitch assigned to the notes on 18 July 2022.

Key Rating Drivers

Fitch rates the notes at the same level as Leumi's Long-Term Foreign-Currency Issuer Default Rating (IDR), as they constitute the bank's unsecured and unsubordinated obligations.

Leumi's Long-Term IDR is at the same level as its Government Support Rating (GSR), which itself is in line with the domestic systemically important bank (D-SIB) GSR for Israel, and reflects Fitch's view of a very high probability that Israel (A+/Stable) would provide support to Leumi, if needed. Fitch believes that Israel has a strong ability to support its banking sector and that the sovereign's propensity to support Leumi is high, particularly given the bank's systemic importance in the country with a market share of about 30% of banking-sector assets.

For further details on Leumi's key rating drivers and sensitivities, see Fitch Affirms Bank Leumi at 'A'; Outlook Stable.

https://www.fitchratings.com/site/pr/10208083

Rating Sensitivities

Factors that could, individually or collectively, lead to negative rating action/downgrade:

The rating on the notes will be downgraded if Leumi's Long-Term IDR is downgraded.

Factors that could, individually or collectively, lead to positive rating action/upgrade:

The rating on the notes will be upgraded if Leumi's Long-Term IDR is upgraded.

Best/Worst Case Rating Scenario

International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579

Date of Relevant Committee

04 July 2022

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

Public Ratings with Credit Linkage to other ratings

Leumi's IDRs and GSR reflect Fitch's expectation of a very high probability of state support from Israel.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg.

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