MANAMA, 25 June 2007 — Capital Intelligence has upgraded Gulf International Bank’s (GIB) long- and short-term foreign currency ratings to A+ and A1 from A and A2, respectively, while raising GIB’s financial strength rating from A- to A. The rating upgrade has been supported by several positive developments including an increase in the bank’s paid-up capital to $1.5 billion contributing to its total equity of $2.3 billion, its sound asset quality and liquidity, improving profitability and excellent cost-to-income ratio, strong credit ratings from shareholders and a well-established regional corporate and project finance franchise in the GCC. The short-term rating of A1 represents the highest rating granted by Capital Intelligence. The A1 short-term rating reflects GIB’s superior credit quality and demonstrates the bank’s highest capacity for timely repayment of short-term financial obligations that is extremely unlikely to be affected by unexpected adversities.
According to Capital’s report, GIB’s enhanced risk profile over the years has continued to increase profitability. Moreover, due to the low proportion of impaired credits and an exceptionally strong provisioning in place, the agency labeled the bank’s asset quality as very sound.
GIB’s liquidity position is also very comfortable because of the significant holdings of high-grade securities and a large volume of bank placements, the report said. The increase in capital during the first quarter of this year, which will help support ongoing business expansion, has strengthened the capital base and demonstrates the shareholder’s continued collective support.
Commenting on the rating upgrades, Dr. Khaled M. Al-Fayez, GIB chief executive officer, said: “The new ratings establish the bank’s leading position in the investment-banking and project-finance market in the region.”
