Moody's upgrades 10 Saudi banks

Moody's Investors Service said it upgraded to A3 from Baa2 the long-term foreign currency deposit ratings for 10 Saudi Arabian banks: The National Commercial Bank, Samba Financial Group, Al Rajhi Banking and Investment Corp., Riyad Bank, The Saudi British Bank, Banque Saudi Fransi, Arab National Bank, Saudi Hollandi Bank, The Saudi Investment Bank and Bank Al Jazira.

The outlook is stable.

This rating action follows Moody's recent upgrade of Saudi Arabia's foreign currency country ceiling for bonds and bank deposits to A3 from Baa2.

The Prime-2 short-term foreign currency deposit ratings and financial strength ratings of the banks are not affected by this rating action, the agency said.

Moody's noted that the foreign currency deposit ratings of the 10 banks are set at the country ceiling of A3 based on the banks' fundamental strengths and the strong likelihood of support from the Saudi Arabian authorities, should the need arise.

However, any future country ceiling upgrades would not automatically lead to upgrades in the foreign currency deposit ratings of all rated Saudi banks, the agency said, because imputing systemic support in the ratings of non-systemic banks with low financial strength ratings may not push their foreign currency deposit ratings much higher.

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