Fitch: Saudi banks on watch

Fitch Ratings said it put the ratings of several Saudi Arabian banks on rating watch negative following the sharp fall in oil prices, which came shortly after Saudi and U.S. central bank rate cuts. Saudi banks are exposed to tightening liquidity if the government withdraws deposits from the banking system to fund the fiscal deficit.

Fitch put the issuer default ratings of National Commercial Bank, Al Rajhi Banking and Investment Corp., Samba Financial Group and its senior unsecured long-term rating and Saudi British Bank on rating watch negative. Also, Fitch put on watch the senior unsecured rating of SABB Sukuk Ltd.

Fitch will resolve the RWN once it has assessed how this economic shock impacts the banking system and the credit profiles of each bank, as well as their ability to adapt. Fitch said it expects to resolve the RWNs in the next six months.

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