Moody's reports stable outlook for Saudi banks

28 September 2010

Assessment reflects strong financial fundamentals despite challenging operating conditions

Moody’s Investors Service has said the outlook for the Saudi banking system is stable, reflecting its resilience and strong financial fundamentals despite the continued challenging operating conditions. However, the credit rating agency said the low interest rate environment is exerting pressure on banks’ profitability through reduced margins and lower business growth. Moody’s expects the banks’ 2010-11 net income to be modestly higher than it has been over the past two years, mainly due to expected lower provisioning charges.

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