Al Rajhi Bank

Leading domestic retail franchise and Islamic bank status. High systemic importance in Saudi Arabia. Strong capital and profitability metrics. Low geographic diversification. Less supportive economic environment. Structural maturity mismatches. S&P Global Ratings' stable outlook on Al Rajhi Bank (ARB) reflects our view that the bank's financial profile will remain resilient over the next 12-24 months. A downgrade of ARB appears remote in the next 12-24 months because it would follow a simultaneous downgrade of Saudi Arabia and our downward revision of our assessment of the bank's stand-alone credit profile (SACP). We could consider revising down the SACP if we saw a further increase in economic risks in Saudi Arabia; a visible decline in the bank's capitalization, with the risk-adjusted capital

... S&P Global Ratings' stable outlook on Al Rajhi Bank (ARB) reflects our view that the bank's financial profile will remain resilient over the next 12-24 months. A downgrade of ARB appears remote in the next 12-24 months because it would follow a simultaneous downgrade of Saudi Arabia and our downward revision of our assessment of the bank's stand-alone credit profile (SACP). We could consider revising down the SACP if we saw a further increase in economic risks in Saudi Arabia; a visible decline in the bank's capitalization, with the risk-adjusted capital (RAC) ratio dropping below 10%; or if the bank experienced a significant deterioration of its asset quality indicators. We could upgrade ARB in the next 12-24 months if the bank's new strategy yields higher revenues diversification and entrenchment with local corporate banking while risks remain in check, or if it strengthens its funding profile through retaining a strong entrenchment in non-remunerated...

Full Report