Fitch Ratings has affirmed Gulf International Bank's (GIB) long-term issuer default rating (IDR) at 'A' and viability rating (VR) at 'bbb-' and said its outlook on the long-term IDR was stable.

The agency said that ratings "reflect Fitch's view of an extremely high probability of institutional support from its majority shareholder, the Saudi government's Public Investment Fund which holds a 97.2 per cent stake."

Fitch also stated that the viability rating reflects GIB's improved financial metrics, particularly its strong liquidity and capital position, reported the Gulf Daily News, our sister publication.

Also, the bank has made good progress in restructuring and strengthening its risk profile over the past few years.

In Fitch's opinion, "GIB has significantly strengthened its funding profile, including raising stable customer deposits and improving the term structure of wholesale funding. The latter highlights the bank's ability to leverage its Saudi government ownership to source external funding when global liquidity conditions are tight."

Fitch views GIB's capitalisation as strong, with a Fitch core capital ratio of 18.1 per cent at end of last year.

"GIB's capital provides a good buffer for expansion or potential weaker asset quality as it ventures into new products and markets," it said.

"We regard this as an independent validation of the actions we have taken over the last four years to restructure the bank as well as our new business strategy," GIB chief executive Dr Yahya Alyahya said.

"The affirmation of the viability rating also reflects Fitch's assessment of GIB on a standalone basis without shareholder support and reflects GIB's fundamental financial strength and risk profile.

"The viability rating was upgraded last year and represented one of very few bank rating upgrades since the financial crisis of 2007/2008," he added.-TradeArabia News Service