Moody's Investors Service has upgraded to A2/Prime-1 the foreign currency deposit ratings for nine Saudi Arabian banks. This rating action follows an earlier similar rating action on Saudi Arabia's foreign currency bank deposit ceilings (A2/Prime-1), to reflect the marked improvement in the country's economic fundamentals.
With the exception of Saudi Investment Bank, whose ratings carry a stable outlook, the outlook for the foreign currency deposit ratings of the other banks is positive, reflecting the outlook for the country ceiling.
None of the banks' financial strength ratings are affected by this rating action; neither are the deposit ratings of Bank al Jazira -- as they were not constrained by the previous country ceilings.
Moody's notes that the foreign currency deposit ratings of the nine banks are set at the country ceiling of A2/Prime-1 based on the banks' fundamental strengths, their importance to the system, as well as the strong likelihood of support from the Saudi Arabian authorities, should the need arise. However, in the future, any country ceiling upgrades would not automatically lead to upgrades in the foreign currency deposit ratings of all rated Saudi banks. This is because imputing systemic support in the ratings of banks with low financial strength ratings may not push their foreign currency deposit ratings higher.
The ratings affected are as follows:
- National Commercial Bank: foreign currency deposit ratings upgraded to A2/P-1 with a positive outlook.
- Samba Financial Group: foreign currency deposit ratings upgraded to A2/P-1 with a positive outlook.
- Al Rajhi Bank: foreign currency deposit ratings upgraded to A2/P-1 with a positive outlook.
- Riyad Bank: foreign currency deposit ratings upgraded to A2/P-1 with a positive outlook.
- The Saudi British Bank: foreign currency deposit ratings upgraded to A2/P-1 with a positive outlook.
- Banque Saudi Fransi: foreign currency deposit ratings upgraded to A2/P-1 with a positive outlook.
- Arab National Bank: foreign currency deposit ratings upgraded to A2/P-1 with a positive outlook.
- Saudi Hollandi Bank: foreign currency deposit ratings upgraded to A2/P-1 with a positive outlook.
- The Saudi Investment Bank: foreign currency deposit ratings upgraded to A2/P-1 with a stable outlook.
At the end of June 2006, National Commercial Bank had total assets of SAR155.1 billion (US$41.4 billion); Samba Financial Group had total assets of SAR112.6 billion (US$30.1 billion); Al Rajhi Bank had total assets of SAR101.2 billion (US$27.0 billion); Riyad Bank had total assets of SAR92.4 billion (US$24.7 billion); Banque Saudi Fransi had total assets of SAR75.5 billion (US$20.2 billion); The Saudi British Bank had total assets of SAR72.8 billion (US$19.4 billion); Arab National Bank had total assets of SAR68.9 billion (US$18.4 billion); Saudi Hollandi Bank had total assets of SAR44.5 billion (US$11.9 billion); and The Saudi Investment Bank had total assets of SAR39.2 billion (US$10.5 billion).
All banks are headquartered in Riyadh, Saudi Arabia, with the exception of National Commercial Bank which is headquartered in Jeddah.
