The rating on Al Rajhi Banking & Investment Corp. (Al Rajhi) reflects the bank's healthy customer franchise, high profitability, and strong capitalization. While the bank's funding profile is strong, management of excess liquidity is more challenging in light of Al Rajhi's Islamic bank status. The rating is constrained by relatively high-risk concentration, and increasing competition in Saudi Arabia. Al Rajhi is one of the five largest Saudi banks in terms of assets. Its widespread branch network and high degree of customer loyalty have enabled the bank to build up the largest demand deposit base of the country. As one of the two fully Islamic banks in the kingdom, Al Rajhi conducts business in accordance with Islamic Law. Competition poses an
