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.

© 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.