Moody’s Revised Gulf Bank’s outlook to 'Positive' from 'Stable'

Moody’s Investors Service, the international credit rating agency, has just announced the change of Gulf Bank’s outlook to “Positive” from “Stable” and affirmed the Bank’s long-term ratings at A3. The Rating action is driven by the improvement in Gulf Bank’s asset quality and profitability over the next 12-18 months and potentially lower through-the-cycle portfolio losses resulting from reduced loan concentration to single borrower and more volatile sectors, along with improvements in the Bank’s underwriting standards over years, said Moody’s in their recently published press release.

The positive outlook reflects Moody’s expectation of further improvement in the bank’s asset quality, with low problem loan levels in line with the Kuwaiti banking sector average, and strong provisioning coverage. This expectation is supported by the rating agency’s expectation for a relatively benign operating environment in Kuwait over the next 12-18 months, supporting low new problem loan formation.

Commenting on Moody’s credit rating announcement, Ms. Dalal Al-Dousari, Gulf Bank’s Head of Investor Relations said: “Gulf Bank continues to achieve international recognition for the sustained improvement in its assets quality. We are proud to witness Gulf Bank’s revised outlook from “Stable” to “Positive” and affirmation of its A3 rating by Moody’s. With this recent credit opinion, Gulf Bank is now rated “A” by all four leading credit rating agencies with two positive outlooks”. “The upgrade is an affirmation of Gulf Bank’s sustained improvement in loan asset quality and profitability, solid capital and sound liquidity position.” Added Al-Dousari.

Gulf Bank continues to be well recognized in terms of its credit worthiness and financial strength internationally. In addition to Moody’s recent upgrade, S&P Global Ratings last year revised their outlook on the Bank to “Positive” from “Stable” and affirmed its issuer credit rating at “A-“ in June 2017. Similarly, Fitch Ratings has upgraded Gulf Bank’s viability rating from “bb” to “bb+” and affirmed the bank’s Long-Term Issuer Default Rating at 'A+' with a “Stable” Outlook. Capital Intelligence on the other hand recently upgraded the Bank’s rating to “A-” from “BBB+” with a “Stable” outlook.