The preliminary 2008 results released by the 10 main commercial banks in Saudi Arabia confirmed that fourth quarter of last year was the worst quarter of the year for all the banks, Fitch Ratings said.
The expectation of tougher conditions for the banks and lower profitability resulted in most banks' individual ratings being downgraded in December. Areas of concern included lower regional economic growth, weakened liquidity due to tightening in the interbank, wholesale and capital markets, higher funding costs and the impact on asset quality of recent rapid credit growth and asset bubbles, notably the property sector.
The agency may revise ratings after seeing the full audited financial statements from the Saudi banks. All the banks reported full-year profits for 2008, although National Commercial Bank, Bank Aljazira and Saudi Investment Bank stood out for reporting losses in fourth quarter of SR2.5 billion, (Dh2.4bn) SR92m and SR91m respectively.