Fitch upgrades rating of 8 Saudi banks to “A-” from “BBB +”‎

Fitch Ratings agency raised the rating of eight Saudi banks, after it had recently raised the sovereign rating of the Kingdom.

According to “Al-Arabiya”, the agency said today, Monday, that the rating of eight Saudi banks had been raised to “A-” from “BBB +”.

On April 5, Fitch raised Saudi Arabia’s rating to “A+” from “A”. The agency attributed the upgrade of the kingdom’s rating to the domestic and external public financial strength, including the debt-to-GDP ratio and the strong net foreign sovereign assets, with a stable outlook.

The rating upgrade included Riyad Bank, The Saudi British Bank (SABB), Banque Saudi Fransi, Arab National Bank (ANB), Alinma Bank, The Saudi Investment Bank, Bank AlJazira, and Gulf International Bank – Saudi Arabia.

With regard to the strength of the Saudi economy, Fitch had said earlier this April that foreign reserves, excluding gold, remained broadly stable in 2022, at $459 billion, as it offset financial account outflows in the form of investments. And deposits abroad, the large current account surplus

Saudi Arabia has one of the highest reserve coverage ratios among Fitch-rated governments in 18 months of current external payments.

Fitch expects reserves to decline marginally to $445 billion in 2023-2024, as the current account surplus declines to approximately 7.5% of GDP in 2023 and 4% in 2024, due to declining oil revenues. However, those foreign investments by large institutions such as the Public Investment Fund and pension funds remain moderate.

The agency also expected real growth of the non-oil private sector by about 5% this year, supported by higher government capital expenditures and Public Investment Fund investments, including mega projects, strong credit growth, continuous development of the retail and entertainment sectors and increased employment among Saudis. ,