Moody’s cuts nine Saudi banks’ deposit ratings

Moody's Investors Service said it concluded its review for downgrade on the ratings of 11 Saudi banks initiated on March 7 by downgrading the long-term deposit ratings of nine banks and confirming the ratings of two banks.

The nine banks are Samba Financial Group, Banque Saudi Fransi, Saudi British Bank, Arab National Bank, Riyad Bank, Saudi Hollandi Bank, Saudi Investment Bank, Bank AlBilad and Bank Al-Jazira.

In addition, the agency confirmed the deposit ratings of Al Rajhi Bank and National Commercial Bank.

All ratings carry a stable outlook.

The actions on the banks follow Moody's downgrade of Saudi Arabia's government issuer rating on May 14 to A1 (stable) from Aa3, which concluded the review for downgrade of the sovereign rating that was initiated on March 4.

The sovereign action reflects the ongoing negative impact of lower oil prices on Saudi's fiscal position and economic strength.

Moody’s said the downgrades of nine Saudi banks reflect, to differing degrees, a combination of: (a) the reduced fiscal capacity of the Saudi government to provide support to the banks in times of stress, if needed; and (b) an assessment of each bank's resilience to the weakening domestic operating environment, which the agency expects will dampen funding, asset quality and profitability in the coming quarters.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.