Fitch believes the deep recession of at least Fitch believes the operating environment impacted by the deep economic recession set challenges on the banking system's financial performance, and consequently NCBJ's financial performance.
Fitch believes NCBJ entered the economic downturn with reasonable asset quality for its rating category. As of September , the day past due ratio slightly increased to 2. Similarly, stage 3 loans increased to 3. Asset quality ratios remained relatively stable, and benefited mainly from relief programs for the consumer segment.
Operating profit to average total assets ratio decreased to 1. Fitch expects that profitability will remain under pressure and lower than pre-pandemic levels in , reflecting high credit costs and lower business volumes. NCBJ's capital ratio of tangible common equity to tangible assets reduced to Nevertheless, loan loss allowances and voluntary capital reserves further supports the bank's capitalization assessment. Fitch expects bank's loss absorption capacity to remain sound in , driven by sound reserves coverage and the expected re-capitalization of total results.
Despite the government's record of having provided extraordinary support to the banking system during prior crises, NCBJ's Support Rating of '4' reflects uncertainties about the sovereign's ability to provide support in light of its high level of indebtedness.
Also, a meaningful and sustained improvement of core profitability, combined with improvements in the bank's credit quality and capitalization. International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario defined as the 99th percentile of rating transitions, measured in a positive direction of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario defined as the 99th percentile of rating transitions, measured in a negative direction of four notches over three years.
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We apologize for any inconvenience this may cause. One of our representatives will be in touch soon to help get you started with your demo. The two Saudi Arabia-based banks recently agreed to merge, forming a combined group holding roughly billion riyals of assets. NCB, already the Middle Eastern nation's largest bank, would be the resultant entity and become the third-largest group in the Gulf Cooperation Council. The rating agency said Oct.
However, operational risks remain, particularly because of the weak economic backdrop in a country badly hit by the decline in oil prices. The agency also said delays in the integration process could still occur, possibly delaying the realization of the merger's benefits. Thank you. We use this when contacting you to make sure we reach the right person.
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