Fitch Ratings has rated the outlook of six Saudi banks to stable from negative, and affirmed the long-term credit rating in local and foreign currencies at BBB+.
According to Arabia Net, the six banks are the Arab National Bank, Banque Saudi Fransi, Alinma Bank, The Saudi Investment Bank, Al Jazira Bank and Gulf International Bank in Saudi Arabia.
Fitch's assessment takes into account the Saudi government's ability to support the banking system given the country's large external reserves.
It also reflects a long record of support for Saudi banks, regardless of their size, financing structure and level of government ownership.
But Fitch warned of the risks of contagion among local banks because the market is small and interconnected, which the agency saw as an additional incentive for the government to support the sector if needed.
This comes after Fitch raised the Kingdom's outlook to stable from negative on July 15 due to the rise in oil prices.
Main rating engines
And Fitch indicated that the rating engine for the six banks, is sovereign support, which leads the rating at the credit score BBB +, which is applied to all Saudi banks, as Fitch said that this reflects our view with a high probability of supporting all lenders in the country from the Saudi authorities. , if necessary.
Fitch expects the Saudi Central Bank's reserves to increase to $470 billion in 2022-2023; The Kingdom has one of the highest reserve coverage ratios among Fitch-rated governments in more than 20 months of current foreign payments.
