The international credit rating agency Fitch Ratings has recently re-affirmed Gulf International Bank’s (GIB) long-term issuer default and short-term ratings at “A” and “F1”respectively, with a stable outlook. The agency also re-affirmed the Bank’s Individual Rating at “C/D” and its subordinated debt obligations at “A”.
Fitch stated that GIB’s ratings reflect the Bank’s strong ownership. The Saudi Government through the Public Investment Fund owns more than 97 per cent of the Bank. The rating agency also referred to GIB’s good capitalisation, improved performance and its return to profitability.
Fitch also commented that the Bank’s funding structure has improved in recent years as it has become less dependent on short-term funding. In addition, GIB’s capitalisation has continued to strengthen, and its efforts to deleverage and de-risk the balance sheet have increased the Bank’s total capital ratio and Tier 1 ratio to 24 per cent and 17 per cent respectively.
Commenting on the Fitch announcement, Dr. Yahya A. Alyahya, GIB’s Chief Executive Officer, said: “We are very pleased with the ratings re-affirmation by Fitch, especially as it comes at a challenging time for financial institutions. We consider this positive announcement by Fitch as an endorsement of the actions taken by the Bank and its shareholders to address the challenges created by the changes in the operating environment”.
Dr. Alyahya added: “These ratings reflect the Bank’s commitment to continue its leading role in the region. We will continue to strengthen our franchise in the GCC states by providing sophisticated, customer-tailored products and services for the benefit of our customers”.
GIB is a leading merchant bank in the Middle East with its principal focus on the GCC states. Its primary shareholder is the Public Investment Fund of Saudi Arabia. The Bank 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.