International credit rating agencies Standard & Poor’s and Capital Intelligence have recently reaffirmed Gulf International Bank’s (GIB) long-term foreign currency ratings of “A-” and “A” respectively. GIB’s short-term foreign currency ratings have also been reaffirmed at “A2” by both agencies, with a stable outlook.
Standard & Poor’s stated in its report that GIB’s ratings reflect “the bank’s supportive ownership structure, enhanced merchant-banking franchise, improving profitability, and solid asset quality.”
Capital Intelligence explained that “GIB is a highly regarded institution in the GCC and wider region commanding a noted market position. The merchant banking strategy launched a few years ago focusing on the regional market continued to manifest itself in the year under review through a further increase in profitability.”
The agency added that “GIB’s strategy also focuses on exploiting the growing opportunities in project finance and corporate finance in the GCC markets while curtailing international non-relationship lending…. GIB’s liquidity position is very comfortable, with high-grade investment securities dominating quasi-liquid asset holdings. Capital is ample and underpinned by the assured support of the bank’s sovereign shareholders.”
Commenting on the reaffirming of the bank’s credit ratings, Dr. Khaled M. Al-Fayez, Chief Executive Officer, stated: “We are committed to manage the bank in such a manner so as to continue to enhance its assigned credit ratings. Under the new Basel II capital adequacy guidelines, capital requirements will be determined based on credit ratings. It is therefore important that banks strive to achieve the highest possible credit ratings.”
Dr. Al-Fayez added: “GIB is one of the highest rated financial institutions in the Middle East. The current ratings provide an independent validation of the successful progress in the implementation of the bank’s GCC-focused merchant banking strategy, which aims at expanding GIB’s fee-based income from services such as asset and fund management, investment banking, capital markets mediation, and project and structured finance.”
GIB 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 $26 billion of its own assets and $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.
