Capital Intelligence (CI), the international credit rating agency, announced that it has affirmed the Financial Strength Rating (FSR) and the Foreign Currency (FC) Ratings of The National Commercial Bank (NCB), based in Jeddah, Saudi Arabia. Supported by its strong liquidity, improving asset quality, steady profitability at several levels and strong franchise, the Bank’s FSR is affirmed at ‘AA-’, with a ‘Stable’ Outlook.
The rating is constrained by the Bank’s higher than average cost structure, its relatively low (compared to its peers) capital ratios, and to some extent the levels of concentration in its loans and in its funding.
For the same reasons, the Long-Term FC Rating is maintained at ‘AA-’ and the Short-Term FC Rating at ‘A1+’, both constrained by the ratings assigned to the sovereign. Because of the recent change in the Sovereign Ratings of the Kingdom of Saudi Arabia – a change in the Outlook from ‘Stable’ to ‘Negative’ – the Outlook for NCB’s FC Ratings is also changed from ‘Stable’ to ‘Negative’. In view of 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 Level remains at ‘1’.
At year end 2014, NCB was Saudi Arabia’s largest bank, both by total assets and by total capital. On that date, its assets totaled SAR434.9 billion (equivalent to USD116.0 billion) – a market share of almost 21%. The Bank’s capital totalled SAR46.9 billion (equivalent to USD12.5 billion), making it the Kingdom’s largest bank by both measurements. At year end 2014, the Bank’s four million customers were served through its network of 333 branches (2013: 312), including nine corporate service centres, 14 retail service centres, over 2,500 ATMs and over 15,000 POS terminals.