International credit rating agency Capital Intelligence (CI) has upgraded Gulf International Bank’s (GIB) long-term foreign currency rating to A from A-. The short-term and Financial Strength ratings have been reaffirmed at A2 and A- respectively, with a stable outlook.
The upgrade in GIB’s long-term foreign currency rating is based on the ongoing success of its merchant banking strategy and the associated improvement in its financial performance and risk profile. CI’s upgrade follows a similar announcement in August by Moody’s Investors Service, which upgraded GIB’s long-term deposit rating to A3 from Baa1.
In its rating report, CI stated that “GIB is a well managed institution commanding a noted market position in the GCC and wider region. The merchant banking strategy launched a few years ago focusing on the region is delivering better results as evidenced by rising fee income and product cross-selling.”
CI added that GIB’s asset quality is sound, reflecting the low risk profile of the balance sheet and the conservative provisioning policy. In addition, the bank’s liquidity position is very comfortable and its capital is ample and underpinned by the assured support of its sovereign shareholders.
Particular strengths identified by CI included the bank’s strong wholesale banking and project finance franchise in the Gulf region and its good overall asset quality.
Commenting on the rating upgrade, Dr. Khaled M. Al-Fayez, GIB’s Chief Executive Officer, stated: “We are very pleased with the new upgrade, which reflects the bank’s ongoing commitment to manage itself in such a manner so as to enhance its assigned credit ratings.”
Dr. Al-Fayez added that as a result, GIB is one of the highest rated financial institutions in the Middle East. The recent rating upgrades from Standard & Poor’s, Moody’s and CI 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 $20 billion of its own assets and in excess of $15 billion of clients’ assets under management. With a proven track record spanning more than 28 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.
The six GCC governments, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, own 72.5 per cent of the bank, while the Saudi Arabian Monetary Agency owns 27.5 per cent. In addition to the bank’s main subsidiary, Gulf International Bank (UK) Ltd., it has branches in London, New York, Riyadh and Jeddah, in addition to representative offices in Beirut and Abu Dhabi.
