...State Support Very Likely: Riyad Bank's (RB) Issuer Default Ratings (IDRs) are driven by an extremely high probability of support from the authorities in Saudi Arabia (AA/Negative), if required. The Negative Outlook on RB's IDR reflects the Negative Outlook on the sovereign rating. This is indicative of a weakening ability of the sovereign to provide support. RB's Viability Rating (VR) reflects the bank's strong capital ratios, solid domestic franchise, solid core earnings generation, sound asset quality, and strong liquidity and funding. It also considers a weakening domestic operating environment and RB's high concentration risks on both assets and liabilities. Weakening Operating Environment: The Saudi Arabian banking sector is facing a tougher operating environment, mainly due to the effect of lower oil prices on government spending and the impact this has on the rest of the economy. Strong Capital Ratios: Capital ratios are strong and commensurate with RB's risk profile. Its Fitch...
