International credit rating agencies Moody's and Fitch affirm Gulf International Bank's ratings

International credit rating agencies Moody’s and Fitch have both recently affirmed Gulf International Bank’s (GIB) credit ratings. Fitch affirmed GIB's long term credit rating at 'A' with a stable outlook. Moody’s Investors Service (Moody’s) affirmed GIB’s senior debt and foreign currency deposit rating at A3 and upgraded the outlook from negative to stable.

Fitch explained in an open statement that GIB's ratings reflect the bank's comfortable liquidity and solid capitalisation and its somewhat more conservative risk appetite than domestic peers".

Moody's affirmed GIB’s A3 senior debt and foreign-currency deposit ratings; A3 senior unsecured MTN programme (foreign currency) ratings; and A3 long-term counterparty risk assessment ratings. Concurrently, the rating agency changed from negative to stable the outlook on the bank's A3 deposit ratings.

Moody’s stated that the affirmation of the ratings “reflects GIB's strong capital and liquidity buffers; improvements in the bank's asset quality metrics; and a reduction in the level of concentrations of the bank's asset base”.

The agency explained the outlook change to stable saying GIB's ratings "reflect GIB's stabilising credit profile and the continued improvement in GIB's financial fundamentals, mainly asset quality and capital, which offset downside risks to asset quality”. 

Moody’s emphasized GIB's positive trend in its asset quality, stating that “as of June 2015, the ratio of non-performing loans to gross loans declined to 2.68% from 5.98% as of December 2012”. The agency further explained that “the affirmation of GIB's A3 foreign-currency deposit and senior debt ratings reflect Moody’s view of a very high probability of support from the bank's major shareholder, Saudi Arabia’s Public Investment Fund”.

Dr. Yahya Alyahya, GIB's Chief Executive Officer, commented on the affirmations, saying: "We’re very pleased with the affirmations of GIB's credit ratings by both Moody’s and Fitch. They are solid confirmations asserting the bank's enhanced asset quality and robust capital position. We’re positive this strength will further improve in future as we expand our presence in the region and globally, generating a steady source of funding and diversified earnings for our shareholders".

Dr. Alyahya added: "The affirmation of the Viability Rating also reflects Fitch's assessment of GIB on a standalone basis without shareholder support and reflects GIB’s experience, fundamental financial strength and risk profile".

GIB is owned by the six Gulf Cooperation Council countries. Saudi Arabia’s Public Investment Fund owns 97.2% of GIB. 

Gulf International Bank (GIB) is a pan-GCC universal bank that specializes in corporate and investment banking and has a growing retail footprint. In addition to its main subsidiaries, London-based Gulf International Bank (UK) Ltd., and Riyadh-based GIB Capital LLC, it has branches in London, New York, Abu Dhabi, Dhahran, Riyadh and Jeddah with representative offices in Dubai and Beirut.