RIYADH: Saudi Arabian banks have managed to contain the fallout from the COVID-19 outbreak, thanks to rising oil prices, Fitch Ratings said in its Peer Review.
“The pandemic’s impact on Saudi Arabian banks has been contained and pressures on the operating environment have largely eased,” it stated.
Fitch highlighted the role of strong oil prices in boosting recovery of the banking sector, expecting performance to further improve with higher interest rates in the coming years.
Supportive government measures including interest-free deposits as well as continued loan growth in the past two years also supported the sector’s economic activity, the rating agency added.
Most recently, Fitch revised the outlook of eight Saudi banks from stable to positive on April 25, while affirming their long-term issuer default rating, also known as IDR at BBB+.