Research Update: Al Rajhi Bank Long-Term Rating Lowered To 'A' On Increased Economic Risks In Saudi Arabia; Outlook Negative

On Oct. 30, 2015, we lowered our ratings on Saudi Arabia to 'A+/A-1' from 'AA-/A-1+' due to a pronounced deterioration of Saudi Arabia's fiscal position. This indicates higher economic risk, leading us to revise our Banking Industry Country Risk Assessment on Saudi Arabia to group '3' from group '2'. We are therefore lowering our long-term rating on Al Rajhi Bank to 'A' from 'A+' and affirming the 'A-1' short-term rating. The negative outlook primarily reflects the negative outlook on the sovereign ratings and our view of increased economic risk trends in Saudi Arabia, as well as our expectation of a moderate but manageable increase in credit losses and lower loan and deposit growth for Al Rajhi Bank. On Nov. 5,

...On Oct. 30, 2015, we lowered our ratings on Saudi Arabia to 'A+/A-1' from '##-/A- + 1+' due to a pronounced deterioration of Saudi Arabia's fiscal position. This indicates higher economic risk, leading us to revise our Banking Industry + Country Risk Assessment on Saudi Arabia to group '3' from group '2'. We are therefore lowering our long-term rating on Al Rajhi Bank to 'A' from 'A+' + and affirming the 'A-1' short-term rating. The negative outlook primarily reflects the negative outlook on the sovereign + ratings and our view of increased economic risk trends in Saudi Arabia, as well as our expectation of a moderate but manageable increase in credit losses and lower loan and deposit growth for Al Rajhi Bank....

Research Update