Riyadh – Mubasher: Fitch Ratings has affirmed the long-term issuer default rating (IDR) of the Saudi Investment Bank (SAIB) at 'BBB+', with a ‘Negative’ outlook. The rating was backed by potential sovereign support.

Fitch also placed a national long-term rating of 'AA-(sau)' to the Saudi financial institution, with a ‘Stable’ outlook, according to a press release.

The viability rating (VR) of the bank reflected “the bank's modest franchise, weaker asset-quality metrics than peers', high asset-and- liability concentrations, and an adequate but less stable funding profile than that of peers,” according to the rating agency.

SAIB’s profitability improved last year, with operating profit-to-risk weighted assets (RWA) at 1.54%, compared to 0.44% in 2019. Net income in 2020 was more in line with the level of other banks in the Kingdom, with return on average equity (ROAE) at 8.1% and return on average assets (ROAA) at 1%.

Fitch added that the Saudi listed bank is “largely funded” through customer deposits that represented 70% of total funding at the end of the first quarter (Q1) of 2021.

The bank’s net profits in 2020 jumped 310% to SAR 980 million from SAR 239 million in 2019.