The international credit rating agency, Fitch Ratings has affirmed Gulf International Bank's (GIB) Long-Term Issuer Default Ratings (IDRs) at ‘A' and the Viability Rating (VR) at ‘bbb-‘. The Outlook for the Long-Term IDR is Stable.
Fitch issued a public statement explaining that GIB's ratings "are driven by Fitch's expectation of an extremely high probability of support from the Bank's longstanding majority shareholder, the Public Investment Fund of Saudi Arabia (AA/Stable; 97.2% stake), despite the bank being licensed and headquartered in Bahrain."
The agency added that "our view of support is driven to a large degree by the Bank's ownership and a strong track record of support, which has been clearly demonstrated in the past, and is the main reason GIB's IDR and SRF (Support Rating Floors) are above those of all but the largest Saudi banks."
Fitch highlighted GIB's Viability Rating, stating that "GIB's VR reflects the Bank's comfortable liquidity and solid capitalisation and its somewhat more conservative risk appetite than domestic peers."
Commenting on the affirmation of the ratings, GIB's Chief Executive Officer, Dr. Yahya A. Alyahya, said: "The affirmation of GIB's rating by Fitch is a clear indication of our robust capital position and funding profile. Furthermore, our strong position and risk profile in the market will help us to successfully expand into the retail banking market in the Kingdom of Saudi Arabia, resulting in a more stable and diversified source of funding."
"We are very pleased with the affirmation of our ratings, which reflects Fitch's assessment of GIB's fundamental financial strength, and robust capital and liquidity positions. This rating will play a significant role in further attracting institutional investors to GIB, leading to an additional source of funding, further supporting GIB in realising its new strategy on its journey to becoming a leading pan-GCC universal bank", added Dr. Alyahya.