Saudi banks placed on Fitch rating watch as oil prices drop – ZAWYA

Saudi banks placed on Fitch rating watch as oil prices drop – ZAWYA

A trader monitors stocks at a Saudi Bank in Dammam October 26, 2008.. Fitch Ratings has placed all 10 Saudi Arabian banks' Viability Ratings (VRs) on Rating Watch Negative (RWN) reflecting heightened risks of unexpected severe and prolonged deterioration in the domestic operating environment.. The RWN placed on all Saudi Arabian banks' Viability Ratings reflect "heightened risks of unexpected severe and prolonged deterioration in the domestic operating environment for Saudi banks following the sharp fall in oil prices, which came just a few days after the interest-rate cuts by the Saudi authorities following the Fed rate cut.". Saudi banks are exposed to tightening liquidity if the government withdraws deposits from the banking system to fund the fiscal deficit.. Fitch will resolve the RWN in the next six months once it has assessed how this economic shock impacts the banking system and the credit profiles of each bank, as well as their ability to adapt..