Moody's Confirms Samba's Solvency, Capital, Asset Quality

LOGO
LOGO
TT
20

Moody's Confirms Samba's Solvency, Capital, Asset Quality

LOGO
LOGO

Moody's confirmed that Samba Financial Group maintained its advanced credit rating with stable prospects in line with the stable outlook for the A1's sovereign rating, supported by the Group's high solvency, strong liquidity, high flexibility against asset risk and high profitability reduces the likelihood of a decline in the Group's credit rating.

Moodys based on Samba's creditworthiness report issued in September was based on a number of topics related to the financial and liquidity register, the equity and equity ratio of the capital base, and flexible asset qualities and profitability levels. By analyzing these indicators, Samba showed strength in its indicators, which gives an optimistic view of its ability to develop profitability.

The quality of SAMBA's assets showed a remarkable stability to a greater degree than its counterparts from other banks. Samba's strategy to reduce market risk was positive, with 72.6 percent of the Investment Records attributable to state and semi-party parties, while the ratio of non-lending to total loans was low, in a positive sign compared with local Saudi banks. With regard to the capitalization axis and profitability, Moody's strong capital reserves confirmed the high capacity to withstand credit losses that can be generated by core and negative expectations.

Samba also maintained a strong share of tangible assets of 18.4 per cent of tangible assets, reflecting a positive achievement that exceeds the gender equality of international and local gender equality. According to the analytical mechanism adopted by Moody's, the capital adequacy ratio for Tier 1 Tier 1 was 22.7 percent according to Basel III and 23.3 percent capital adequacy ratio, which strengthens the positive outlook for the bank's market capitalization over the period 12 to 18 months ahead.

With regard to the bank's strong financing and liquidity ratio, supported by strong domestic deposits, it is noted that the acquisition of the market refinancing item for tangible bank balances was 5.6% and much lower than the average of 18.1%.

Reporting the bank's ability to maintain its deposit stability despite limited confidence for market funding. During the past 18 months, Samba has had the opportunity to maintain its deposit stability and low demand levels. The bank's liquidity ratio remains strong, enabling short-term deposit fluctuations with positive expectations of earnings. With a strong liquidity position based on the bank's reputation, its leading brand and private bank.

Based on these positive indicators, Moody's revealed that it expects Samba to maintain strong earnings levels that support its credit points, and that, thanks to credit growth and lower operating costs, Samba can overcome any supply pressures.

Samba has recorded the highest profit in the bank's history since its start in the second half of 2018.

Moody has stated in its report that Samba's efficiency and high credit rating was due to the Bank's increasing dependence on banking technology, strong banking culture, commitment to overall quality standards for business management, strong business business and its active operations in project finance, cash management, financial products and corporate finance.



Vujcic: ECB Should Not 'Overreact' if Inflation Edges Below 2%

FILE PHOTO: The European Central Bank (ECB) in Frankfurt, is photographed during a heavy rain storm ahead of the ECB council meeting later this week, Germany, March 14, 2023. REUTERS/Kai Pfaffenbach/File Photo
FILE PHOTO: The European Central Bank (ECB) in Frankfurt, is photographed during a heavy rain storm ahead of the ECB council meeting later this week, Germany, March 14, 2023. REUTERS/Kai Pfaffenbach/File Photo
TT
20

Vujcic: ECB Should Not 'Overreact' if Inflation Edges Below 2%

FILE PHOTO: The European Central Bank (ECB) in Frankfurt, is photographed during a heavy rain storm ahead of the ECB council meeting later this week, Germany, March 14, 2023. REUTERS/Kai Pfaffenbach/File Photo
FILE PHOTO: The European Central Bank (ECB) in Frankfurt, is photographed during a heavy rain storm ahead of the ECB council meeting later this week, Germany, March 14, 2023. REUTERS/Kai Pfaffenbach/File Photo

The European Central Bank should not "overreact" to euro-zone inflation edging below its 2% target as there are good reasons to believe it will come back up, ECB policymaker Boris Vujcic told Reuters.

The ECB cut interest rates on Thursday for the eighth time in a year but signaled at least a policy pause next month, despite projecting inflation at just 1.6% next year. Inflation in the 20 countries that share the euro was 1.9% in May, according to a flash reading published last week.

Vujcic, who is also Croatia's central bank governor, said price growth was likely to bounce back later and that monetary policy should not try to do "precision surgery" on small fluctuations from its goal.

"A few tens of basis points' deviation on either side of the target is not a problem," Vujcic said in an interview on Saturday in Dubrovnik. "Because you will always have small deviations. If you consider them as a problem, then you will overreact. This is not precision surgery."

Vujcic said it was reasonable to expect inflation to edge back up as energy prices find a bottom and the economy accelerates. Euro strength is also unlikely to have second-round effects on prices unless it lasts several quarters, Vujcic said.

Some ECB policymakers, especially Portugal's central bank governor Mario Centeno, worry that euro-zone inflation may slow too much.

Vujcic said he sees the risks surrounding the inflation outlook as "pretty balanced" but cautioned there was "complete uncertainty" surrounding global trade tensions with US President Donald Trump's administration.

Vujcic recalled advice he received as a young deputy governor from then-Federal Reserve Chair Alan Greenspan: a high rate of inflation was more dangerous than a low one. Greenspan cited two decades of relatively benign deflation in the late 19th century, which was partly due to improvements in productivity, Vujcic said.

"Nobody cared about low inflation because of the productivity growth," he said. "You have a monetary policy problem to bring it up. Yes, but why would you insist so much if you don't have a problem in the economy?"

The ECB is reviewing its long-term strategy, including the role of massive bond purchases, or quantitative easing, in reviving inflation when it is too low.

The ECB injected some 7 trillion euros ($8 trillion) of liquidity into the banking system through QE and other tools over the past decade. These schemes were blamed for inflating bubbles in real estate and setting up the central bank for sizeable losses.

"The next time around, people will take the lessons from the previous episode, and I think that the bar for QE would be higher," Vujcic said.

He said QE could help stabilize dysfunctional markets - such as during the 2008 financial crisis and the COVID-19 pandemic - but if used "for years and years to try and bring inflation up, its marginal efficiency declines".

Such calls for self-criticism are shared by some policymakers in the ECB's hawkish camp. But sources told Reuters they were unlikely to feature in the ECB's new strategy document, to be published this summer.