Economy

Biggest Saudi banks will be profitable despite low interest rates: Moody’s

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Alanbatnews -

National Commercial Bank (NCB), Al Rajhi Bank, and Saudi British Bank (SABB), the three largest banks in Saudi Arabia, will maintain their profitability despite lower interest rates impacting their margins, according to new research from credit ratings agency Moody’s Investors Service.

"SABB will be hardest hit because it must also absorb the costs of its merger with smaller peer Alawwal Bank, and NCB will face a similar pressure if its planned merger with Riyad Bank is completed,” said Ashraf Madani, VP-Senior Analyst at Moody's.

Madani added that Al Rajhi is more protected due to its retail focus but will be affected should interest rates stay low in the long term.

"Nevertheless, sound efficiency and strong capital at all three banks will protect their credit profiles,” he concluded.

Together the three banks represent a 47 percent share of the Kingdom’s banking assets, according to Moody’s.