Saudi banks' extra zakat payments for years up to and including 2017 removes a key near-term uncertainty that could have pressured some banks' ratings, Fitch Ratings says.
The extra amounts, due to a backdated change in the zakat calculation, will not materially deplete banks' capital buffers and therefore do not affect their ratings.
"We do not expect a significant impact on liquidity or profitability as we believe the banks will be allowed to spread payments over several years," according to Fitch.
Banks disclosed their extra zakat amounts last month after reaching a settlement with Saudi Arabia's General Authority of Zakat and Tax (GAZT).
However, the settlement amounts for 2018 will be disclosed separately, and the calculation method for future years' zakat is not yet clear. Some banks could still face pressure on ratings if future zakat assessments appear likely to structurally weaken their internal capital generation.
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Fitch ratings for Saudi Banks |
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Bank |
Rating |
Outlook |
|
Al Rajhi |
A- |
Stable |
|
Alawwal Bank |
BBB+ |
RWP |
|
ANB |
BBB+ |
Stable |
|
Bank Aljazira |
BBB+ |
Stable |
|
Banque Saudi Fransi |
A- |
Stable |
|
NCB |
A- |
Stable |
|
Riyad Bank |
A- |
Stable |
|
SABB |
A- |
Stable |
|
SAIB |
BBB+ |
Stable |
|
SAMBA |
A- |
Stable |
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