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Gulf International Bank gets stable outlook

Manama, September 25, 2011

Bahrain-based Gulf International Bank (GIB) said the credit rating agency Capital Intelligence has affirmed its long-term and short-term foreign currency ratings at “A” and “A1” respectively with a stable outlook.

GIB, a leading bank in the Middle East with principal focus on the GCC states, said its financial strength rating has also been maintained at “BBB+.” The short-term rating of “A1” is the highest rating granted by Capital Intelligence.

The “A1” short-term rating is defined by the agency as reflecting superior credit quality and the highest capacity for timely repayment of short-term financial obligations that is extremely unlikely to be affected by unexpected adversities.
 
In its comments, Capital Intelligence said, 'GIB’s ownership remains a key positive rating driver testifying to an exceptionally strong and supportive shareholder through the Saudi government-owned Public Investment Fund.'

'This support is very likely assured over the foreseeable future and accordingly the Support level of 1 is affirmed,' it stated.

Capital Intelligence said the bank’s ratings are also predicated on the fact that a majority of its risk assets are domiciled in higher rated sovereigns.

'In addition, GIB’s balance sheet remained solidly capitalised providing a strong buffer against possible adverse eventualities. Measures of loan-based liquidity continued to improve due to the twin effects of a cautious lending policy and deleveraging.'

'As a result of the latter and actions taken to lengthen the maturity profile of liabilities and reduce the mismatch between maturities of assets and liabilities, funding risks have reduced. Sources of funding are reasonably diversified and depositor concentrations are improving,” the ratings agency said.

GIB chief executive officer Dr Yahya A. Alyahya said, “The affirmation of the bank’s ratings by Capital Intelligence, and by all the other international credit rating agencies during the past few months, is a very significant achievement, as it comes at a time when many regional and international banks, and sovereigns have been downgraded.”

Dr Alyahya pointed out that GIB’s funding profile has substantially improved over the past few years as it has taken proactive measures to reduce the mismatch in the maturities of its assets and liabilities and significantly reduced its dependency on short term funding.

'The Bank’s efforts to deleverage and derisk the balance sheet have also significantly strengthened its financial position and enhanced its capital adequacy ratios,' he added.-TradeArabia News Service




Tags: Capital Intelligence | Outlook | Gulf International Bank | stable |

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