Top agency reaffirms GIB currency ratings
Manama, June 26, 2012
Bahrain-based Gulf International Bank's (GIB) long-term and short-term foreign currency ratings have been reaffirmed by Capital Intelligence at A and A1 respectively, while 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 that GIB's ownership remains a key ratings driver, and the bank's very solid capital position provides a firm basis for expansion and a strong buffer against eventualities.
Capital Intelligence indicated that the bank's liquidity ratios continued to improve because of the sustained contraction in loans coupled with ongoing expansion in customer deposits and term finance.
The bank's liquidity was largely held in short-term bank placements and to a lesser extent high rated investment securities.
"GIB continued to deleverage its balance sheet - loans and interbank deposits both contracted - evidencing the emphasis being given to de-risking and enhancing liquidity, following the financial setback a few years earlier," the agency said.
"We are very pleased with the ratings reaffirmation, and we view it as an independent endorsement of the actions taken by the bank and its shareholders to address the challenges created by the changes in the operating environment for financial institutions," said GIB chairman Jammaz bin Abdullah Al Suhaimi.
"We also believe this is a very significant achievement, as it comes at a time when many regional and international banks have been downgraded," he added.
"The rating reaffirmation by Capital Intelligence follows the recent upgrade of GIB's viability rating by Fitch, which reflected the rating agency's positive assessment of the bank's performance on a standalone basis and the improvement in its fundamental financial strength and risk profile," said GIB chief executive Yahya A Alyahya.
"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 de-risk the balance sheet have also significantly strengthened its financial position and enhanced its capital adequacy ratios," he added. – TradeArabia News Service
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