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Bank Industry Risk Analysis: A Bright Future For Saudi Banks, Despite Stock Market Collapse May 07
Standard & Poors, May 2007
Abstract
Strong financial performance High capitalization Ample liquidity Strict banking regulation and supervision Economy sensitive to oil-price fluctuations and government spending Indirect vulnerability to a drop in real estate prices and seesawing stock markets Booming credit growth although slowed down by the recent stock market crash Nascent foreign competition in niche segments The banking system in the Kingdom of Saudi Arabia (A+/Stable/A-1) is the largest in the Gulf, with total assets of Saudi Arabian riyal (SAR) 861.1 billion ($229.9 billion at SAR3.75 to $1) at year-end 2006. Given its size, it remains protected with 21 commercial institutions--11 locally incorporated entities and 10 foreign banks. Sector strength is based on the banks' strong financial performance, ample liquidity, high capitalization, and strict supervision...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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