...Support Drives IDRs: Bank Aljazira's (BAJ) Issuer Default Ratings (IDRs) are driven by a high probability of support, if required, from the Saudi authorities. This considers the authorities' long record of support for Saudi banks and their strong ability to provide support, but also BAJ's limited systemic importance. Limited Company Profile: BAJ's Viability Rating (VR) is highly influenced by its limited company profile. BAJ had a market share of about 3% of banking system financing and deposits at end-2016. The bank's earnings have limited diversification, with the treasury function generating over half of its 2016 net income. BAJ's limited company profile also influences its risk appetite, with the bank less able to bank the kingdom's largest (and generally safest) borrowers due to size constraints and a lack of competitive advantage. This leaves a customer base from more niche corporate, commercial and retail segments, which can be higher risk. Vulnerable Asset Quality: The VR is also...
