JCR-VIS Credit Rating Company Ltd has upgraded the entity ratings of Samba Bank Limited (SBL) from 'AA-/A-1' (Double A Minus/A-One) to 'AA/A-1' (Double A/A-One). Outlook on the assigned ratings is 'Stable'. Previous rating action was announced on June 24, 2014. SBL's sponsor, the Samba Financial Group (SFG) is a prominent banking group in Saudi Arabia and rated among the Top 50 safest banks worldwide by Global Finance.
Ratings also reflect SBL's improved risk profile on a standalone basis as underpinned by strong capitalization, liquidity and asset quality indicators. Management has developed a long term business plan which envisages stringent liquidity and capitalization buffers. The bank has ample room to grow its risk weighted assets; capital buffer is projected to remain strong. Given a well-articulated policy framework for undertaking financing and investment exposures, credit risk on the bank's books remains within manageable limits. To accommodate the expansion plan, significant investment in IT infrastructure is projected in future including the implementation of a new core banking system in FY16.