Riyadh – Mubasher: the liquidity of Saudi Arabian banks improved significantly since 2016, whereas the country’s economy drop is likely to make a rise in non-performing loans (NPLs), Fitch Ratings on Thursday said.
Most of the Kingdom’s banks had liquidity coverage ratios above 200% by the end of the first half of 2017 which considered strong, the rating agency’s report added.
Fitch Ratings forecasted that NPLs will grow in the banks sector, and credit demand will reduce in H2-17 and H2-18, in addition to expectations of drop in Saudi gross domestic product (GDP) less than 1% in 2017 and 2018.
The rating agency confirmed that the sector's asset quality is considered strong.
Fitch Rating expected improvement in credit growth in the banks in 2017, as some banks achieved higher profits.
The ratings of most of the 11 Saudi banks which are rated by Fitch Ratings are driven by their standalone credit advantages.
Al Rajhi Bank, Banque Saudi Fransi, National Commercial Bank, Riyad Bank, SAMBA Financial Group and Saudi British Bank will be rated at the highest rating of “A-“.
The smaller banks which their rating expectations rely on support from the Saudi authorities if needed will be rated “BB+”.