Moody’s downgrades 9 Saudi banks, affirms 2 others

Moody’s Investors Service on Monday downgraded the long-term deposit ratings of nine Saudi banks, while affirming the ratings of two others; all 11 banks carry a stable outlook.

The ratings action came just two days after Saudi Arabia’s government issuer rating was downgraded to A1 (stable) from Aa3 due to the “ongoing negative impact of lower oil prices on Saudi's fiscal position and economic strength,” Moody’s said.

SAMBA Financial Group (SAMBA), Banque Saudi Fransi (BSF), Saudi British Bank (SABB), Arab National Bank (ANB), Riyad Bank (Riyad), Saudi Hollandi Bank (SHB), Saudi Investment Bank (SAIB), Bank AlBilad and Bank Aljazira (BJAZ) were downgraded.

Moody’s pointed to the Saudi government’s reduced fiscal capacity to provide support and each bank’s level of resilience to the weakening domestic operating environment as causes.

Meanwhile, the ratings agency confirmed the A1 deposit ratings of Al Rajhi Bank (ARB) and National Commercial Bank (NCB) on their expected resilience to the aforementioned pressures.