...IDRs Driven by State Support: Riyad Bank's (Riyad) Issuer Default Ratings (IDRs) are driven by an extremely high probability of support from the Saudi Arabian authorities (AA-/Negative), if required. This reflects a strong (albeit declining) ability to provide support, a long history of state support, as well as the bank's status as a domestic systemically important bank. VR Downgrade: Riyad's Viability Rating (VR) is highly influenced by the weakening operating environment in Saudi Arabia, but it also reflects the bank's solid capital ratios, solid core earnings generation and high concentration risks in assets and liabilities. The VR of Riyad has been downgraded reflecting weakened financial metrics, in particular in funding and liquidity. Some financial metrics do not compare well with the highest rated banks in the sector. Weakening Operating Environment: The operating environment has weakened in Saudi Arabia. Lower oil prices have slowed loan growth and reduced liquidity in the system...
