Moody's assigns national scale ratings to Aljazira, Riyad, SABB, Samba

Moody's Investors Service assigned, on Oct. 7, National Scale Ratings (NSRs) for the long- and short-term deposit ratings as well as the long- and short-term Counterparty Risk Ratings (CRRs) of Bank Al-Jazira, Riyad Bank, Samba Financial Group and Saudi British Bank (SABB).

The rating action on long- and short-term deposit ratings as well as counterparty risk ratings (CRRs) of the four Saudi Arabian lenders follow a new NSR map by Moody's for the government of Saudi Arabia.

Bank Aljazira was assigned A3.sa/SA-2 national scale deposit ratings and A2.sa/SA-1 national scale CRRs. These ratings are underpinned by the bank's standalone Baseline Credit Assessment (BCA) of baa3 and two notch of government support uplift, which results in a global scale long-term deposit rating of Baa1. The A3.sa is the higher of two NSR categories corresponding to the bank's local currency deposit global scale rating.

BAJ's A3.sa NSR deposit rating reflects the bank's small but growing Islamic banking franchise, improved capitalisation and sound liquidity and funding. These strengths are moderated by pressures on the bank's solvency in the next two years on the back of lower oil prices, reduced government spending and the coronavirus-induced disruption.

Riyad Bank was assigned Aa2.sa/SA-1 national scale deposit ratings and Aa1.sa/SA-1 national scale CRRs. These ratings are underpinned by the bank's global scale long-term deposit rating of A2, which in turn reflects a standalone BCA of baa1 and two notches of government support uplift.

Riyad Bank's Aa2.sa NSR deposit rating captures its strong capital base, stable deposit-based funding; and resilient profitability, supported by the bank's solid franchise in multiple business lines. These strengths are moderated by the high asset-quality risks we expect in the next two years on the back of lower oil prices, reduced government spending and the coronavirus induced disruption.

Samba Financial Groupreceived Aa1.sa/SA-1 national scale deposit ratings and Aa1.sa/SA-1 national scale CRRs. These ratings are underpinned by the bank's global scale long-term deposit rating of A1.

Samba's Aa1.sa NSR deposit rating captures its solid funding and liquidity; and strong solvency, with high capital buffers and solid profitability. These strengths, however, are moderated by risks to its asset quality and profitability on the back of lower oil prices, reduced government spending and the coronavirus-induced disruption.

Moody's assigned Aa1.sa/SA-1 national scale deposit ratings and Aa1.sa/SA-1 national scale CRRs to SABB. These ratings are underpinned by the bank's standalone BCA of a3 and two notch of government support uplift, which results in a global scale long-term deposit rating of A1.

SABB's Aa1.sa NSR deposit rating reflects the bank's stable funding and sound liquidity, solid profitability and efficiency as well as strong capitalisation. These strengths are moderated by pressures on the bank's solvency in the next two years on the back of lower oil prices, reduced government spending and the coronavirus-induced disruption.

NSRs for the four Saudi banks will face upward or downward pressure if their corresponding GSRs are upgraded or downgraded, unless this is in conjunction with a recalibration of the national scale with an offsetting impact on NSRs, Moody’s added.