Saudi Banks Raised at Credit Suisse After Saad Deal

Saudi Arabian bank stocks were upgraded at Credit Suisse Group AG, which said historically low valuations and an agreement to refinance debt owed to the banks by Saad Group will spur investor confidence.

Samba Financial Group, Saudi British Bank, Al-Rajhi Bank and Riyad Bank were raised to “outperform” from “neutral,” Credit Suisse London-based analyst Mohamad Hawa wrote in a research note today. Banque Saudi Fransi and Arab National Bank were upgraded to “neutral” from “underperform.”

Saad, which has interests in construction, finance and real estate, has been given more time to pay about 10 billion riyals ($2.7 billion) to a group of mainly local creditors after its default, a person familiar with the accord said last week. The deal may lure investors back to bank shares trading at a 67 percent discount to their five-year average price-to-book ratio and a 48 percent discount to the average price-to-earnings ratio, Hawa wrote.