Capital Intelligence affirms GIB’s “A” credit rating

The international credit rating agency Capital Intelligence has affirmed Gulf International Bank’s (GIB) long-term and short-term Foreign Currency Ratings at “A” and “A1” respectively. The Bank’s Financial Strength Rating is also maintained at “BBB+.” All ratings have been assigned a Stable outlook. 

The short-term rating of “A1” is the highest rating granted by Capital Intelligence. The “A1” short-term rating is defined by the agency as reflecting superior credit quality and the highest capacity for timely repayment of short-term financial obligations that is extremely unlikely to be affected by unexpected adversities. 

The rating agency said in a public statement that “GIB’s ownership remains a key positive rating driver testifying to an exceptionally strong and supportive shareholder through the Saudi government-owned Public Investment Fund. This support is very likely assured over the foreseeable future and accordingly the Support level of 1 is affirmed.” 

Capital Intelligence added: “The Bank’s ratings are also predicated on the fact that a majority of its risk assets are domiciled in higher rated sovereigns.” In addition, “GIB’s balance sheet remained solidly capitalised providing a strong buffer against possible adverse eventualities. Measures of loan-based liquidity continued to improve due to the twin effects of a cautious lending policy and deleveraging. As a result of the latter and actions taken to lengthen the maturity profile of liabilities and reduce the mismatch between the maturities of assets and liabilities, funding risks have reduced. Sources of funding are reasonably diversified and depositor concentrations are improving.” 

Dr. Yahya A. Alyahya, GIB’s Chief Executive Officer, commented: “The affirmation of the Bank’s ratings by Capital Intelligence, and by all the other international credit rating agencies during the past few months, is a very significant achievement, as it comes at a time when many regional and international banks, and sovereigns have been downgraded.”  

Dr. Alyahya explained that “GIB’s funding profile has substantially improved over the past few years as it has taken proactive measures to reduce the mismatch in the maturities of its assets and liabilities and significantly reduced its dependency on short term funding. The Bank’s efforts to deleverage and derisk the balance sheet have also significantly strengthened its financial position and enhanced its capital adequacy ratios.” 

GIB is a leading bank in the Middle East with its principal focus on the GCC states. Its primary shareholder is the Public Investment Fund of Saudi Arabia. The Bank 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.