Fitch affirms SAMBA Financial Group at 'A+'/'F1'; outlook stable

The Support Rating Floor is affirmed at 'A+'.

The Outlook for the Long-term IDR is Stable.

SAMBA's IDRs are support-driven and reflect Fitch's view that there is a very high probability of support being provided by the Saudi regulators, if ever required.

The Individual rating reflects SAMBA's intrinsic strengths, including its strong commercial franchise and robust financial indicators.

It also takes into account risks inherent in the domestic economy.

SAMBA has expanded rapidly under continuing favourable economic conditions and its strong franchise in corporate banking.

While core revenues remain robust, the bank has seen some pressure on profitability in recent quarters, due to lower brokerage fees and investment losses and impairment charges relating to structured credit investments.

Overall, the impact of the latter on profitability has not been material.

Fitch views positively the bank's ability to maintain high margins and to run low-cost operations. Its profitability ratios remain high and compare well across its peer group.

Fitch also notes SAMBA's strong funding profile and solid liquidity and capital adequacy ratios, which are key rating drivers.

The agency's main concerns are SAMBA's rapid loan growth and the effect of rising inflation on future asset quality; these are also systemic issues.