Moody's assigns national scale ratings to four Saudi lenders

These banks are Bank AlJazira, Riyad Bank, Samba Financial Group, and Saudi British Bank

  
The King Fahd highway in Riyadh, Saudi Arabia. Image use for illustrative purpose

The King Fahd highway in Riyadh, Saudi Arabia. Image use for illustrative purpose

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Riyadh –   Moody's Investors Service has assigned national scale ratings (NSRs) for the long-and-short term deposit ratings and counterparty risk ratings (CRRs) of four Saudi banks.

These banks are Bank AlJazira, Riyad Bank, Samba Financial Group, and Saudi British Bank (SABB), according to a recent press release.

NSRs provide a measure of relative creditworthiness within a single country and are derived from global scale ratings (GSRs) using country-specific maps.

Bank AlJazira

Moody's assigned A3.sa/SA-2 national scale deposit ratings and A2.sa/SA-1 national scale CRRs to Bank AlJazira. These ratings reflect the bank's standalone baseline credit assessment (BCA) of baa3 and two notches of government support uplift. The A3.sa is the higher of two NSR categories corresponding to the bank's local currency deposit global scale rating.

The lender’s A3.sa NSR deposit rating indicates the bank's small but growing Islamic banking franchise, improved capitalisation, sound liquidity, and funding. These strengths are moderated by pressures on the bank's solvency in the next two years due to lower oil prices, reduced government spending, and the coronavirus-induced disruption.

Riyad Bank

Moody's assigned Aa2.sa/SA-1 national scale deposit ratings and Aa1.sa/SA-1 national scale CRRs to Riyad Bank. These ratings are underpinned by the bank's global scale long-term deposit rating of A2.

Riyad Bank's Aa2.sa NSR deposit rating highlights its strong capital base, stable deposit-based funding; and resilient profitability. These strengths are moderated by the high asset-quality risks that Moody’s expects in the next two years.

Samba Financial Group

The credit rating agency assigned Aa1.sa/SA-1 national scale deposit ratings and Aa1.sa/SA-1 national scale CRRs to Samba. The Aa1.sa is the second-highest NSR that can be achieved by any entity in Saudi Arabia and the highest currently assigned to any bank.

Samba's Aa1.sa NSR deposit rating captures its solid funding and liquidity; and strong solvency, with high capital buffers and solid profitability. However, these strengths are moderated by risks to its asset quality and profitability.

SABB

Moody's assigned Aa1.sa/SA-1 national scale deposit ratings and Aa1.sa/SA-1 national scale CRRs to SABB, capturing the bank's standalone BCA of a3 and two notches of government support uplift.

SABB's Aa1.sa NSR deposit rating reflects the bank's stable funding, sound liquidity, solid profitability, and strong capitalisation. These strengths are moderated by pressures on the bank's solvency in the next two years.

Source: Mubasher

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