Moody's downgrades Banque #Saudi Fransi and Saudi British Bank | ZAWYA MENA Edition

Moody's downgrades Banque Saudi Fransi and Saudi British Bank | ZAWYA MENA Edition

Moody's Investors Service has downgraded two Saudi Arabian banks, Banque Saudi Fransi (BSF) and Saudi British Bank (SABB).

On BSF, the agency downgraded its local and foreign currency long-term bank deposit ratings to A2 from A1. The bank's Baseline Credit Assessment (BCA) and Adjusted BCA were downgraded to baa1 from a3.

“The outlook on the bank's long-term deposit ratings remains negative, reflecting the negative outlook on the A1 issuer rating of the Saudi government.”

Moody’s said while BSF continues to have strong asset quality, this has deteriorated in recent years. It expects asset-quality risks to persist at a higher level as some borrowers, particularly in the construction and commerce sectors, remain impacted by the coronavirus-induced disruption and the government's spending remains disciplined due to moderate oil prices.

Moody's expects BSF's profitability to rebound going forward but remain below pre-COVID levels.