Summary: 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. We could upgrade ARB in the next 12-24 months if we saw increased capitalization, with ARB's risk-adjusted capital (RAC) ratio sustainably exceeding 15%, and the bank's asset quality, profitability, and funding metrics remaining broadly stable. We could also raise the rating if the bank's strategy yields higher revenue diversification and entrenchment in local corporate banking, while risks remain under control. A downgrade of ARB appears

...Outlook: Stable 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. We could upgrade ARB in the next 12-24 months if we saw increased capitalization, with ARB's risk-adjusted capital (RAC) ratio sustainably exceeding 15%, and the bank's asset quality, profitability, and funding metrics remaining broadly stable. We could also raise the rating if the bank's strategy yields higher revenue diversification and entrenchment in local corporate banking, while risks remain under control. A downgrade of ARB appears remote in the next 12-24 months because it would follow a simultaneous downgrade of Saudi Arabia and a downward revision of our assessment of the bank's intrinsic creditworthiness. We could consider revising down the latter if we saw a further deterioration in the economic environment in Saudi Arabia; a visible decline in the bank's capitalization, with its RAC ratio dropping below...

Summary