MOODY'S Investors Service has reaffirmed Gulf International Bank's (GIB) long-term and short-term foreign currency deposit ratings of A3 and P-2, respectively, the bank said in a statement Tuesday. Moody's said GIB's solid capital base, high liquidity and improving funding profile have led to the rating reaffirmation. "The rating is supported by the bank's strong capital base (Tier 1 of 19.2 percent as at year end 2011) and robust funding and liquidity profile, which has materially improved in the past few years. The bank's ownership by the Saudi government (Aa3 stable) is a key factor in the bank's standalone credit strength, helping business origination and funding," Moody's noted. The rating agency pointed out that GIB has a new sound business strategy, which aims at restructuring its current business and expanding its product base and franchise in the GCC. GIB's Chief Executive Officer, Dr. Yahya A. Alyahya, said: "We believe Moody's reaffirmation of the bank's ratings is a very significant achievement and an independent endorsement of its efforts and the actions taken over the past few years to restructure operations and improve profitability and funding." He added: "This rating reaffirmation follows an upgrade of GIB's viability rating by Fitch a few weeks ago, which reflected the Fitch's positive assessment of the bank's performance on a standalone basis and the improvement in its fundamental financial strength and risk profile." "GIB has been reorienting its focus away from longer-term, lower-yielding project finance and syndicated exposures toward shorter-term bilateral loans to regional... mid-corporate segments," Moody's said.
