Fitch Ratings painted a stable outlook for the Saudi banking sector, indicating that it has limited expectations of changes in the banks Long-term Issuer Default Ratings (IDRs) in the near to medium term.
The IDRs of seven of the 10 Saudi banks rated by Fitch are driven by expected support, if needed, from the Saudi sovereign (AA-/Stable), the ratings agency said Tuesday.
Consequently, their outlooks mirror that of the sovereign and would only change should Fitch change its opinion on the propensity of sovereign support. The stable outlooks on the remaining banks, with IDRs driven by their standalone strength, reflect the institutions sound capitalization, improving asset quality and strong funding profiles.
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