Global Arab Network | Saudi Arabia-based Arab National Bank Ratings Reflect Comfortable Liquidity

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Saudi Arabia-based Arab National Bank Ratings Reflect Comfortable Liquidity

Global Arab Network - - George Haddad

Thursday, 15 July 2010 13:25

Fitch Affirms Saudi Arabia-based Arab National Bank with Stable Outlook

Fitch Ratings has affirmed Saudi Arabia-based Arab National Bank's (ANB) Long-term foreign currency Issuer Default Rating (IDR) at 'A' with Stable Outlook. Fitch has simultaneously affirmed its Short-term foreign currency IDR at 'F1', Individual Rating at 'B/C', Support Rating at '1' and Support Rating Floor at 'A-'.

ANB's profitability has been affected by a sluggish domestic economy (0.2% GDP growth) and some large borrowers' defaults in 2009. It remained reasonable although slightly below peers'. The bank's reported asset quality worsened sharply but is still sound and somewhat better than most of its peers'.

ANB's IDRs also reflect its large domestic franchise, comfortable liquidity and well- controlled market risks. They are, however, constrained by concentrations on both sides of the balance sheet and potential further deterioration in asset quality, albeit from a strong base.

The bank's Support rating and Support Rating Floor reflect the extremely high probability of support from the Saudi authorities, should it be required, in view of ANB's strong domestic franchise and the regulator's history of support to the banking system. Fitch also believes there to be a moderate probability of support from Jordan's Arab Bank ('A-'/Stable), which owns 40% of ANB and is well-established throughout the region.

Established in 1979, ANB was the seventh-largest bank in Saudi Arabia by total assets at end-Q110, with a market share of about 9% of loans. It has a well established domestic franchise in corporate and personal banking.

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