Fitch Ratings has affirmed Gulf International Bank's (GIB) long-term issuer default ratings (IDRs) at 'A' and the viability rating (VR) at 'bbb-'.

The outlook for the long-term IDR is stable, said a report in the Gulf Daily News (GDN), our sister publication.

“GIB's ratings are driven by Fitch's expectation of an extremely high probability of support from the bank's longstanding majority shareholder, the Public Investment Fund of Saudi Arabia (AA/Stable; 97.2 per cent stake), despite the bank being licensed and headquartered in Bahrain,” Fitch said.

“Our view of support is driven to a large degree by the bank's ownership and a strong track record of support, which has been clearly demonstrated in the past, and is the main reason GIB's IDR and SRF (support rating floors) are above those of all but the largest Saudi banks,” the ratings agency said.

According to it, GIB's VR reflects the bank's comfortable liquidity and solid capitalisation and its somewhat more conservative risk appetite than domestic peers.

“The affirmation of GIB's rating by Fitch is a clear indication of our robust capital position and funding profile,” GIB chief executive Dr Yahya Alyahya said.

“Furthermore, our strong position and risk profile in the market will help us to successfully expand into the retail banking market in Saudi Arabia, resulting in a more stable and diversified source of funding.

“This reflects Fitch's assessment of GIB's fundamental financial strength, and robust capital and liquidity positions.

“This will play a significant role in further attracting institutional investors to GIB, leading to an additional source of funding, further supporting it in realising its new strategy on its journey to becoming a leading pan-GCC universal bank,' Dr Alyahya added. - TradeArabia News Service