The ratings on Saudi Arabia-based Al Rajhi Bank reflect the bank's healthy customer franchise in the retail sector, excellent profitability, concentrations in loans and deposits that are lower than peers', and strong capitalization. The ratings are constrained by limited business and geographic diversification, as well as increasing loan leverage and competition. In terms of assets, Al Rajhi is the third-largest Saudi bank. With the most extensive branch network in the kingdom (in excess of 380 branches), the bank has been able to build up the widest demand deposit base in Saudi Arabia. Given its size and retail entrenchment, Al Rajhi is systemically important to the Saudi banking industry. As such, the ratings include a one-notch uplift to reflect the opinion
