Fitch Ratings affirmed Gulf International Bank (GIB) long-term issuer default rating (IDR) at A and viability rating (VR) at bbb-.
The outlook on the long-term IDR is stable.
“GIB’s ratings are not constrained by the Bahrain Country Ceiling of ‘BBB+’ reflecting the Bank’s majority Saudi ownership, its wholesale banking licence, its primarily US dollar-based balance sheet and offshore banking business with limited exposure to Bahrain,” Fitch in a statement said.
Fitch also said that the Viability Rating reflects GIB’s improved financial metrics, particularly its strong liquidity and capital position. Also, it added, the Bank has made good progress in restructuring and strengthening its risk profile over the past few years.
“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% at end-2012 provides a good buffer for expansion or potential weaker asset quality as it ventures into new products and markets.”
“We are very pleased with the affirmation of GIB’s credit ratings by Fitch. 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,” Dr. Yahya A. Alyahya, GIB’s Chief Executive Officer, 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 in 2012 and represented one of very few bank rating upgrades since the financial crisis of 2007/2008.”