GFH’s Rating Affirmed And Outlook Revised To Positive By S&P
GFH Financial Group B.S.C (“GFH” or “the Group”) today announced that S&P Global Ratings (S&P) has revised the outlook on the Group’s long-term issuer credit rating to positive from stable and affirmed its 'B-' long-term issuer credit rating.
According to the report, the positive outlook reflects the Group’s ability to maintain resilient revenue generation over 2020-2021 and a rebound in business performance in 2021 with a Group return on equity (ROE) of 9.0% in 2021, compared with 4.7% in 2020.
This improvement is noted to be largely spurred by higher treasury business volumes, where the Group generates a positive spread from investment in predominantly regional sovereign sukuk and structured products. Investment banking transactions also proved resilient since customers keen for cash yields retained their appetite for income-generating commercial real estate in Europe and the US.
S&P also highlighted further improvements in the Group’s commercial banking subsidiary, which showed robust results after a significant portfolio clean-up in 2020, and the positive impact of the planned spin-off of the Group’s real estate assets, which it noted, once completed, would help further revitalize the Group's balance sheet and increase the share of income-generating assets.
The rating was also said to take into account expectations that the Group will operate with somewhat stronger liquidity than before. Over the course of 2021, GFH's coverage of short-term wholesale funding improved to about 116% at Sept. 30, 2021, from about 94% at year-end 2020.
The report concludes by noting that further improvements to GFH’s ratings would be linked to progressing on the spin-off of legacy real estate assets and revitalization of its balance sheet.
GFH Financial Group
GFH is a well renowned financial group in the GCC region, with a diversified offering and pioneering track record. Headquartered in Bahrain, GFH’s innovative approach to Islamic investment banking services has been recognised internationally for over a decade. GFH has developed a strong and consistent ability to identify, successfully bring to market and capitalise on a wide range of solid investment opportunities in some of the world’s most dynamic markets and sectors. This approach signifies the Group’s investment insights and commitment to increase the value of its assets, and financial returns to its investors and shareholders.