Lebanese banks Bank Audi and Byblos Bank have had their outlooks revised downwards from stable to negative, by US rating agency Fitch ratings.

Fitch maintained the same rating of ‘B’ for both banks’ long-term issuer default rating and viability rating.

The revision reflects the heightened political risk in Lebanon due to the involvement of Hezbollah and Sunni groups in the neighbouring Syrian conflict.

Sectarian violence in Lebanon is worsening and the increasing number of refugees is adding to the tension.

With no agreement over the formation of a new government, political decision-making has stalled since March 2013. Proposed presidential elections in 2014 are also adding to the uncertainty in the country.

On 27 December, a former Lebanese minister and adviser to ex-prime minister Saad Hariri was killed in a car bomb in central Beirut. Mohamad Chatah was a Sunni Muslim and publicly criticised Syria’s President Bashar al-Assad and Lebanon’s Hezbollah movement.