Fitch upgrades gib’s credit rating to “a”
International credit rating agency Fitch Ratings has upgraded Gulf International Bank’s (GIB) long and short-term ratings to “A” and “F1” respectively, from “A-” and “F2.”
In a special report on bank support in the GCC, Fitch explains that the upgrade reflects a significant improvement in the economic environment in which GIB operates, and related improvements in the ability of the bank’s GCC government shareholders to provide support in the unlikely event that it is required. Fitch also explains that the improvements are based on higher oil and gas prices, which have resulted in improved public finances and buoyant economic environments across the GCC.
Dr. Khaled M. Al-Fayez, GIB’s Chief Executive Officer, stated that he was delighted with the upgrade in the ratings, reiterating the fact that GIB is one of the highest rated financial institutions in the Middle East.
He added that the upgrade to “A” follows a number of upgrades in the Bank’s ratings over the last few years reflecting GIB’s strong financial performance and the enhancement of the bank’s business franchise as a result of the adoption of a GCC-focused merchant banking strategy. The success of this strategy has been endorsed by the upgrades in the bank’s ratings.
Dr. Al-Fayez commented that an “A” rating is defined by Fitch as “high credit quality, denotes expectations of low credit risk, and the capacity for payment of commitments is considered strong.”
“Under the new Basel II proposals, which are due to be implemented in 2008, capital requirements will be determined based on credit ratings. It is therefore important that banks strive to achieve the highest possible credit ratings in order to enhance their standing in the financial community,” he explained.
Bahrain-based Gulf International Bank is a leading merchant bank in the Middle East with its principal focus on the Gulf Cooperation Council (GCC) states. It is one of the largest regional banks in the GCC, with more than $24 billion of its own assets and in excess of $20 billion of clients’ assets under management. With a proven track record spanning more than 30 years, GIB provides client-led, innovative financial products and services to a wide customer base in the region, including investment banking, asset management, project and structured finance and Islamic banking.
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