The international rating agency Fitch Ratings has assigned a long term IDR of ‘A’ to Gulf Investment Corporation (GIC). GIC has also been assigned a short term rating of ‘F1’, and the outlook for both is Stable.
Mr. Hisham Al Razzuqi, CEO of GIC, commented, “This rating action from Fitch reaffirms GIC’s premier position in the region, and is an external validation of our successful business model”.
GIC is rated A- by Standard & Poor’s and A2 by Moody’s. This is the first time Fitch has rated the Corporation and the rating agency has highlighted GIC’s ownership structure and adequate capitalization as key strengths. An excerpt from the Fitch report stated, “The individual rating of GIC reflects its satisfactory capitalization and cost efficiency, as well as consistent profitability and good franchise in private equity investments.”
Fitch also viewed positively the high quality asset base of the corporation, as is highlighted in the following excerpt from their rating report: “Potential principal investments undergo a rigorous due-diligence process with only a few projects taken forward. GIC has a good track record in private equity investment and losses have been limited.
“The bank’s investments in debt securities and credit funds are nearly all investment grade, enhancing liquidity. Capital is satisfactory considering the bank’s risk profile, with Tier 1 and Total capital ratios of 20.8% and 22.9%, respectively, at end June 2006.”
GIC’s emphasis on sound risk management was also highlighted by Fitch in their report, which stated, “The bank has relatively advance risk management tools in place and measures its risk adjusted performance using economic capital and RORAC techniques.”
In light of the sound rating and the corporation’s strong year-to-date performance, Mr. Hisham Al Razzuqi, CEO, added, “The superior ratings reflect, among other strengths, the Corporation’s consistently strong track record. We hope to continue this growing trend in profitability, and expect 2006 to be another record year, with many milestones achieved.”
The Corporation, with a shareholder’s equity base of US$ 1.6 billion, as of 30th June 2006, continues to be one of the most strongly capitalized financial institutions within the region. GIC’s financial strength is reflected in the superior risk based capital ratios.
Gulf Investment Corporation is a leading regional financial institution that was established under the auspices of the Gulf Cooperation Council and is equally owned by the six member states of the Council: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
