Saudi Arabia\'s banking system is among the safest in the world, according to new global assessment published by Standard & Poor\'s on Wednesday. The ratings agency gave the Gulf kingdom a Banking Industry Country Risk Assessment (BICRA) rating of 2, upgraded from 3, making it the most low-risk banking sector in the Middle East. Globally, only Canada and Switzerland were ranked higher with a Group 1 rating while Saudi Arabia were in the same group as countries such as Germany, France, Hong Kong, Singapore, Norway and Finland. Both the US and the UK were ranked in Group 3, S&P said in a statement, which also showed. The UAE\'s BICRA rating was downgraded from Group 4 to 5 weighed by a high exposure to real estate and uncertainty about exposure to some government-related entities (GREs). S&P said: \"Although UAE\'s banking regulation is gradually moving toward international standards, we believe progress can still be made in implementing existing regulations and supervising the banks in the system more effectively.\" Last week, Moody\'s maintained its negative outlook on the UAE banking system, saying lending would be subdued for the near-term. S&P also downgraded the BICRA rating for Bahrain from Group 5 to 6 where it joined the likes of Croatia, Estonia, and Guatemala. Kuwait\'s banking sector was upgraded from Group 5 to 4, alongside Qatar, Oman, Peru, South Africa, Malaysia, and Mexico. Like Kuwait, Oman\'s banking sector was upgraded by one group by S&P while Qatar maintained its Group 4 rating. Globally, S&P said banking sectors still face trying times in the aftermath of the financial crisis. \"We believe the risk of downward changes to the BICRA groups presently outweighs the possibilities for upward revisions. This is true for both mature and emerging economies,\" S&P said in a statement. In Western Europe and North America, banks are more vulnerable, mainly because of the continued repercussions of financial market turmoil and, in the case of Europe, sovereign distress. By comparison, banking industry risks have stayed relatively stable in Central and Eastern Europe, the Middle East, and Africa, as well as in Asia-Pacific, S&P said. On Saudi Arabia\'s banking sector, S&P said its banks \"have adequate lending practices and underwriting standards, as well as a good track record in maintaining strong asset quality indicators\". The ratings agency also assigned an economic risk score of 3 for the kingdom, reflecting its view that there is intermediate risk in economic resilience, low risk in economic imbalances, and intermediate risk in credit risk. This was again the best rating for the Gulf region as the UAE was given a score of 5, Bahrain scored 6, while Kuwait, Oman and Qatar rated 4. All Gulf governments were assumed to be \"highly supportive\" towards domestic banking, the S&P report said. A BICRA is scored on a scale from 1 to 10, ranging from the lowest-risk banking systems (1) to the highest-risk (10). Belarus, Greece and Vietnam were the only banking systems which scored a 10 out of 86 countries covered by the ratings.