CI affirms GFH’s long-term rating BB and outlook at stable

Hisham Al-Rayes

BAHRAIN: GFH Financial Group (GFH) says that Capital Intelligence (CI), the international credit rating agency, has affirmed its long-term rating at BB and the short-term rating at B. The outlook for GFH’s ratings has also been affirmed as stable.
According to the report, GFH’s ratings are supported by the group’s improved diversification of risk assets and revenue streams, sound capital adequacy and satisfactory leverage notwithstanding increases attributable to the consolidation of the group’s commercial banking arm KHCB.
Also supporting the ratings is the forthcoming $135 million sukuk announced by the group, which is earmarked to refinance and extend existing loan maturities. The rating constraints are the ongoing earnings volatility, despite a rebound in Q1, 2016 and the still challenging investment environment exacerbated by the fall in oil prices. However, the report also noted that looking ahead revenue volatility was likely to diminish and income generation to strengthen due to the increasingly strong performance and results of KHCB.
Commenting on Capital Intelligence’s ratings, Hisham Al-Rayes, CEO of GFH Financial Group, said: “We are pleased with this affirmation of our ratings by Capital Intelligence. As a leading international credit rating agency, their confirmation of the financial health and continued stable outlook for the group underscores the success of our strategy and our sound financial and operational performance and results over the past year.”
Al-Rayes added: “As noted in the report, we have significantly diversified our revenue streams, have adequate levels of liquidity, paid down debt and established a stronger capital base. These actions have provided us with even stronger foundations and more flexibility in the ongoing pursuit of our investment activities and efforts to create even greater value for our shareholders.”