S&P downgrades five Saudi banks on high risks

Standard & Poor’s (S&P) has downgraded five Tadawul-listed banks due to increased economic risks amid lower oil prices. 

The ratings of National Commercial Bank (NCB), Al Rajhi Bank, Riyad Bank, Saudi British Bank, and Samba Financial Group were cut one notch to “BBB+” from “A-” with stable outlook.

 
“Banks in Saudi Arabia now face higher economic risk due to the fall in oil prices and the ensuing slowdown in the Saudi economy,” said Suha Urgan, an analyst at S&P.

Meanwhile, the agency maintained the ratings of Banque Saudi Fransi (BSF) and Arab National Bank (ANB) at “BBB+/A-2” along with The Saudi Investment Bank (SAIB) at “BBB/A-2,” adopting a stable outlook. 

S&P added that it expects non-performing loans (NPLs) to increase due to potential defaults amid lower profitability and tougher credit conditions.