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Fitch acts on 11 Saudi banks

Fitch Ratings on March 30 took ratings actions on 11 Saudi banks, following the downgrade of Saudi Arabia's ratings on March 22.

Fitch downgraded by one notch the long-term issuer default ratings and support rating floors of Al Rajhi Banking & Investment Corp., National Commercial Bank, Riyad Bank, Samba Financial Group, Arab National Bank, Alawwal Bank, Saudi Investment Bank, Alinma Bank and Bank AlJazira. The outlooks on all nine banks' long-term ratings were revised to stable from negative.

The downgrade of the banks' support rating floors reflects the country's weakening ability to support its banks, if needed. That action triggered the downgrade of the long-term issuer default ratings for the nine affected banks, whose support rating floors were higher than their respective viability ratings.

Fitch also downgraded by one notch the support rating floors of Banque Saudi Fransi and Saudi British Bank but noted that the issuer default ratings of these two banks, as well as the viability ratings of all 11 banks, were unaffected by the sovereign ratings action, as the agency believes that the rationale for the sovereign downgrade is already considered in its assessment of stand-alone creditworthiness.

The support ratings of Banque Saudi Fransi, Saudi British Bank, Arab National Bank, Alawwal Bank, Saudi Investment Bank, Alinma Bank and Bank Aljazira were downgraded to 2 from 1.

Fitch affirmed the F1 short-term issuer default ratings of Al Rajhi Bank, National Commercial Bank, Riyad Bank and Samba Financial Group and the F2 short-term issuer default ratings of Alawwal Bank, Alinma Bank, Arab National Bank, Bank Aljazira and Saudi Investment Bank.

The stable outlook on the long-term issuer default ratings of all banks, except Banque Saudi Fransi and Saudi British Bank, reflects the stable outlook on the sovereign rating.

The outlooks on the long-term ratings of Banque Saudi Fransi and Saudi British Bank remain negative, reflecting continued domestic challenges that affect all Saudi banks but that prompt negative outlooks for the pair because their viability ratings are higher than their support rating floors.