Gulf International Bank’s Financial Strength Rating upgraded
International credit rating agency Capital Intelligence has upgraded Gulf International Bank’s (GIB) Financial Strength Rating from BBB+ to A-. The Bank’s long-term and short-term ratings were reaffirmed at A- and A2 respectively, with a stable outlook.
The Financial Strength Rating provides an evaluation of a bank’s inherent financial strength and soundness, excluding all potential external support. The A- rating is defined as reflecting strong financial fundamentals and very favourable non-financial considerations, such as strategy and management.
The rating upgrade, which follows similar upgrades by Fitch Ratings and Moody’s Investor Services, reflects the success of GIB’s new GCC-focused merchant banking strategy and the improved environment in which it operates.
Capital Intelligence’s rating report stated that GIB’s new merchant banking strategy “appears to be paying dividends as evidenced by rising fee income and product cross-selling” and continued “GIB’s financial profile remains sound, characterised by an adequate level of capital, a conservative provisioning policy and comfortable liquidity”. Particular strengths identified in the report include a strong wholesale banking and project finance franchise in the Gulf region and good overall asset quality.
Dr. Khaled M. Al-Fayez, GIB’s Chief Executive Officer, stated that he was delighted with the new upgrade, which reflected the bank’s ongoing commitment to manage itself in such a manner as to enhance its assigned credit ratings. He added that as a result, GIB is one of the highest rated financial institutions in the Middle East. The rating upgrade provides a further independent validation of the successful progress in the implementation of the bank’s GCC-focused merchant banking strategy.
Gulf International Bank (GIB) is a leading merchant bank in the Middle East with its principal focus on the Gulf Cooperation Council (GCC) states. The six GCC governments, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, own 72.5 per cent of the bank, while the Saudi Arabian Monetary Agency (SAMA) and J. P. Morgan Overseas Capital Corporation own 22.2 per cent and 5.3 per cent respectively. In addition to its main subsidiary Gulf International Bank (UK) Ltd, the Bank has branches in London, New York and Riyadh, in addition to representative offices in Beirut and Abu Dhabi. (albawaba.com)
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