Saudi Banks Show Signs of Stress With Stocks Cheaper Than Assets
- Price-to-book ratio of Saudi banks near lowest in 10 Years
- Lenders punished on outlook for more bad loans, outflows: SIC
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Saudi banking stocks have fallen to the lowest levels in at least a decade relative to their net assets, showing the slump in oil is stoking concern that bad loans will increase.
Following a 10 percent slide since the start of the year, an index of 12 lenders on the Tadawul All Share Index is trading at an average 1.3 times book value, near the weakest since Bloomberg started tracking the data in 2006. Four of those have fallen below their net assets, compared with two in December, while two others are trading at multiples of just above 1. They include Samba Financial Group and Riyad Bank, the nation’s third- and fourth-biggest banks.