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Monday, 24 October 2016

Fitch: Strongest Saudi Banks Defy Tough Operating Environment | Reuters

Fitch: Strongest Saudi Banks Defy Tough Operating Environment | Reuters:

"Saudi Banks: Peer Review here LONDON, October 24 (Fitch) Five Saudi Arabian banks stand out, demonstrating particular strengths in the face of the country's increasingly tough operating environment, Fitch Ratings says. These banks achieve 'a-' standalone Viability Ratings (VR), which are higher than the 'bbb+' score we assign to the country's operating environment. The remaining six Saudi Arabian banks rated by us all have VRs either at or below 'bbb+'. National Commercial Bank (NCB) is the country's leading corporate bank and second largest in retail. The strength of its franchise delivers earnings metrics that are among the strongest in the sector and a strong retail franchise also supports a low-cost funding base and strong liquidity. Banque Saudi Fransi's low risk appetite, with its conservative underwriting standards, supports the bank's strong asset quality indicators. We expect the operating environment to eventually weigh on these ratios but, in our opinion, any deterioration should be less pronounced than for peers, reflecting the bank's conservative approach to risk. As a result, its capital buffers should hold up better. "



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