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 stated in a public statement 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.
“Continued to improve because of the sustained contraction in loans coupled with ongoing expansion in customer deposits and term finance,” Capital Intelligence, in a statement said.
“The Bank’s liquidity was largely held in short-term bank placements and to a lesser extent high rated investment securities. Sources of funding continued to diversify and concentration risks have improved,” it added.
“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. We also believe this is a very significant achievement, as it comes at a time when many regional and international banks have been downgraded,” GIB’s Chairman, Jammaz bin Abdullah Al-Suhaimi, said.
“The rating reaffirmation by Capital Intelligence follows the recent upgrade of GIB’s Viability Rating by the Fitch rating agency, which reflected Fitch’s positive assessment of the Bank’s performance on a standalone basis and the improvement in its fundamental financial strength and risk profile,” Dr. Yahya A. Alyahya, GIB’s Chief Executive Officer, said.
“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,” Dr. Alyahya, added.
GIB is a leading bank in the Middle East with its principal focus on the GCC states. Its primary shareholder is the Public Investment Fund of Saudi Arabia.