Tuesday 14, March 2017 by Nabilah Annuar

CI lowers The National Commercial Bank’s rating

Capital Intelligence Ratings (CI), the international credit rating agency, has lowered the Financial Strength Rating (FSR) and the Foreign Currency Ratings (FCRs) of The National Commercial Bank (NCB), based in Jeddah, Saudi Arabia, due to the recent change in the Sovereign Ratings of the Kingdom of Saudi Arabia.

The Long-Term FCR is lowered to ‘A+’ from ‘AA-’ and the Short-Term FCR is lowered to ‘A1’ from ‘A1+’. At the same time, the Outlook is changed to ‘Stable’ from ‘Negative’. These ratings are constrained by the sovereign rating.

The change in the Sovereign Ratings also affects the Bank’s FSR, which is lowered to ‘A+’ from ‘AA-’. The Outlook for this rating remains ‘Stable’.

The ratings are supported by NCB’s strong capital profile, sound and improving operating profitability, strength in customer deposit-gathering, and strong franchise. The ratings are constrained by the recent tightening in liquidity, the higher than average cost structure, the levels of concentration in its loans (to some extent), and particularly by the current operating environment.

Due to the Bank’s prominent position in the Saudi banking sector and its majority government ownership, official support is expected to be forthcoming in the unlikely event it is needed. Consequently, the Support Rating remains at ‘1’.

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