We think that Saudi banks face increased economic risks, owing to the drop in oil prices and the resulting slowdown in the Saudi economy. We expect credit conditions for Saudi banks will deteriorate through a correction cycle, leading to increased nonperforming loans and credit losses, as well as declining profitability. We are consequently lowering our long-term rating on Saudi Arabia-based Al Rajhi Bank to 'BBB+' from 'A-' and removing it from CreditWatch negative. We are affirming our 'A-2' short-term rating on the bank. The outlook is stable, reflecting our expectation that the bank's financial profile will remain resilient over the next 12-24 months. On March 31, 2016, Standard&Poor's Ratings Services lowered its long-term counterparty credit rating on Saudi
