S&P upgrades Saudi National Bank's rating to ‘A-’ with stable outlook

Logo of Saudi National Bank

S&P Global Ratings upgraded the long-term issuer credit rating of Saudi National Bank, formerly National Commercial Bank (NCB), to ‘A-’, with a stable outlook.

The upgrade follows the bank's merger with Samba Financial Group (Samba) under the name Saudi National Bank (SNB).

The rating agency maintained the bank’s short-term issuer credit rating at ‘A-2’ while assigning the GCC regional scale rating of ‘gcAAA’.

“The stable outlook reflects our expectations that SNB will maintain a solid capital base and that the joint entity will successfully manage the risks associated with integration and further lending growth,” S&P said.

“SNB now enjoys a prime market position, strong capitalization, a well-balanced risk profile and growth in loans."

The rating agency expected SNB to maintain its asset quality compared to its peers in the Kingdom and the GCC region, although the non-performing loans (NPLs) is expected to account for 1.6% of total loans, and the cost of risk is likely to hit 90 basis points due to COVID-19 repercussions.

The financing growth is anticipated to continue in 2021, but at a lower space of 12%, compared to the initial estimates of 18% in 2020.

NCB and Samba recently announced the completion of their historic merger to create a new Saudi banking champion and a regional powerhouse, Argaam earlier reported.