S&P assigns A/A-1 ratings to Arab National Bank

JEDDAH — Standard & Poor's Ratings Services has assigned its 'A/A-1' long- and short-term counterparty credit ratings to Saudi Arabia-based Arab National Bank (ANB). The outlook is stable.

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Published: Fri 7 Jul 2006, 12:10 PM

Last updated: Sat 4 Apr 2015, 2:59 PM

"The ratings on ANB reflect the bank's strong financial performance, robust asset quality, and satisfactory liquidity," said Standard & Poor's credit analyst Anouar Hassoune.

"ANB is considered systemically important to the Saudi banking industry. Therefore, the ratings include a one-notch uplift to reflect our expectation that government support would be likely if needed," he said.

These strengths are somewhat offset by ANB's below-domestic-average, although adequate, capitalisation, and limited geographic diversification, as well as increasing competition in the Saudi banking market.

"We expect that ANB will maintain its strong performance, and continue to benefit from its close relationship to government agencies," Hassoune said.

To a certain extent, the ratings on ANB are constrained by the Saudi economy's structural weaknesses. The ratings could be raised following significant and sustained improvements in the diversification and liberalisation of the Saudi economy and a stronger credit culture among domestic corporate borrowers. The ratings could come under pressure, however, if ANB's profitability starts to erode, and if capital ratios or asset quality deteriorate significantly.

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