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Fitch: Three Saudi banks to negative
Fitch Ratings said it affirmed 11 Saudi Arabian banks as part of a peer review of the Saudi banking sector.
At the same time, Fitch revised the outlooks on three of the banks, Arab National Bank, Banque Saudi Fransi and Saudi British Bank, to negative from stable.
Fitch said the negative outlooks reflect its reassessment of the relative intrinsic strengths and weaknesses of the three banks in comparison with their peers.
The factors considered include relatively lower capital ratios and therefore lower capital buffers for the three banks compared with stronger peers in an environment of potentially strong loan growth, higher loan concentrations for Banque Saudi Fransi and Saudi British Bank and a higher cost/income ratio for Arab National Bank.
However, Fitch said it recognizes that all three banks have low NPL ratios and high loan loss reserve coverage, so the banks' capital bases are unlikely to need to absorb losses in the foreseeable future.
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