Saudi Arabia banks get rating upgrade following ceiling action

Moody’s Investors Service has upgraded the long-term foreign currency deposit ratings of eight Saudi Arabian banks to A1 from A2 and affirmed their Prime-1 short-term ratings. This rating action follows an earlier upgrade of Saudi Arabia‘s foreign currency bank deposit ceiling to A1/Prime-1, with a positive outlook.
The outlook for the banks’ A1 deposit ratings is stable, except for Samba Financial Group, Saudi British Bank and Banque Saudi Fransi, that have a positive outlook. The ratings of the first two banks remain constrained by the A1 country ceiling, while that of Banque Saudi Fransi is set at the country ceiling. None of the bank financial strength ratings (BFSR) are affected by this rating action; nor are the deposit ratings of Saudi Investment Bank and Bank Al-Jazira — as they were not constrained by the
previous country ceilings.
According to Moody’s, the deposit ratings are based on the individual bank’s Baseline Credit Assessment, the country’s Local Currency Deposit Ceiling (LCDC) and Moody’s assessment of possible support (i.e. parental or systemic being provided to the bank in case of need). The local currency deposit ratings of the rated banks (ranging from A3 to Aa3), continue to derive from the unchanged Aa3 Local Currency Deposit Ceiling for Saudi Arabia.

The ratings affected are as follows:
– National Commercial Bank: Foreign currency deposit ratings upgraded to A1/P-1 with a stable outlook;

– Samba Financial Group: Foreign currency deposit ratings upgraded to A1/P-1 with a positive outlook;

– Al Rajhi Bank: Foreign currency deposit ratings upgraded to A1/P-1 with a stable outlook;

– Riyad Bank: Foreign currency deposit ratings upgraded to A1/P-1 with a stable outlook;

– The Saudi British Bank: Foreign currency deposit ratings upgraded to A1/P-1 with a positive outlook;

– Banque Saudi Fransi: Foreign currency deposit ratings upgraded to A1/P-1 with a positive outlook;

– Arab National Bank: Foreign currency deposit ratings upgraded to A1/P-1 with a stable outlook;

– Saudi Hollandi Bank: Foreign currency deposit ratings upgraded to A1/P-1 with a stable outlook.