Moody's Investors Service has changed the outlook to positive from stable for Arab National Bank's D+ financial strength rating. The bank's foreign currency deposit ratings remain unchanged at the Baa3/Prime-3 country ceiling and have positive outlook.
Moody's said that the improvement in outlook reflects ANB's strengthening franchise and financial condition. As a result of the strategic re-focus and operational re-engineering, Moody's explained, ANB has become a more dynamic player on the Saudi Arabian banking scene.
The agency views positively the steps taken by ANB to adopt a more proactive business approach, sharpen its customer focus and broaden its range of products and services. The bank remains well capitalized, and has tightened its credit risk management and built up comfortable provision reserves.
Moody's said that it expects these operational improvements to enable the bank to grow its franchise in the Kingdom, making it more defensible against competition, and to support the on-going enhancements in its financial results, so as to bring ANB closer to the better performers in the market.
Profitability ratios should improve further as the bank grows its non-interest income and as provisioning requirements abate. However, Moody's noted, it expects operating costs to remain a burden on the bank's efficiency ratios for the next 2-3 years as ANB makes further investments in its Information Technology (IT) and branch infrastructure.
Arab National Bank is headquartered in Riyadh, Saudi Arabia, and had total assets of 41.9 billion Saudi riyals ($11.2 billion) as at June 30, 2002. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
