The ratings on Saudi Arabia-based Al Rajhi Banking & Investment Corp. (Al Rajhi) 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, increasing loan leverage and competition, and the bank's vulnerability to shocks in real estate and capital markets. 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. A fully Islamic bank, Al Rajhi conducts business in accordance with Sharia (Islamic law).
