Standard & Poor's (S&P) has affirmed Bahrain-based Gulf International Bank's (GIB) long-term and short-term counterparty credit ratings at BBB+ and A-2 respectively with a stable outlook.

S&P said in its report that the ratings on GIB reflect its very strong capital and earnings and strong liquidity.

The rating criteria also took into consideration the bank's adequate risk position and moderate business position.

The US ratings agency explained that its assessment of GIB's capital and earnings as very strong reflects the bank's very robust capitalisation.

S&P said that GIB's risk-adjusted capital ratio before adjustments is expected to stay above 15 per cent in the next 18 to 24 months. GIB's strong liquidity is another mitigating factor, it added.

The agency also stated that GIB is one of the most efficient GCC banks, noting that its ratio of non-interest expenses to total assets averaged 0.6pc over the past three years.

S&P said the Bahrain bank was implementing a new business plan involving the start-up of a retail bank across the Gulf but initially operating in Saudi Arabia.

This is important for the bank's business model because it provides comfort to counterparties dealing with GIB, it added.

Commenting on the ratings, GIB chief executive Yahya A Alyahya said, 'We are very pleased with the ratings affirmation by S&P and view it as an endorsement of the actions of the bank and its shareholders to address the challenges created by the changes in the operating environment.'

He emphasised that GIB's strong ownership structure, its exceptionally strong capitalisation and efficiency, and improved liquidity levels have led to the ratings affirmation.-TradeArabia News Service