Capital Intelligence upgrades GIB's credit rating to 'A+'

The Bank's financial strength rating has also been upgraded to "A" from "A-."

The short-term rating of "A1" is the highest rating granted by Capital Intelligence. The "A1" short-term rating is defined as reflecting "superior credit quality. Highest capacity for timely repayment of short-term financial obligations that is extremely unlikely to be affected by unexpected adversities".

Capital Intelligence stressed in its report that the rating upgrade is supported by a number of positive developments. These include the increase in the Bank's paid up capital to US$ 1.5 billion contributing to total equity of US$ 2.3 billion, its sound asset quality and liquidity, improving profitability and excellent cost-to-income ratio, the strong credit rating of the shareholders, and the Bank's well-established regional corporate and project finance franchise in the GCC.

The agency's report stated, "GIB is a highly regarded institution in the GCC and wider region, commanding a noted market position. The merchant banking strategy adopted in 2002 focusing on the regional market has enhanced the Bank's risk profile and continues to increase profitability. Asset quality is very sound, reflecting the low proportion of impaired credits and exceptionally strong provisioning in place."

In addition, "GIB's liquidity position is very comfortable due to the significant holdings of high grade securities and a large volume of bank placements. The increase in capital during the first quarter of 2007, which will help support ongoing business expansion, has strengthened the capital base and demonstrates the shareholder's continued collective support," said the report.

Commenting on the rating upgrades, Dr. Khaled M. Al-Fayez, GIB's Chief Executive Officer, said: "The rating upgrade is yet another validation of GIB's sound business strategy, its high asset quality and liquidity, and its strong risk management infrastructure."

Dr. Al-Fayez added that the new ratings reflect the Bank's leading position in the investment banking and project finance market in the region. "Our ability to provide sophisticated, customer-tailored products and services that provide innovative solutions to complex financial requirements has strengthened our franchise and led to improved profitability. We are looking forward to continued upgrades in our ratings in the future."

GIB is a leading merchant bank in the Middle East with its principal focus on the GCC states. It is one of the largest regional banks in the GCC, with more than US$26 billion of its own assets and US$22 billion of clients' assets under management. The Bank provides specialised financial products and services including investment banking, asset management, project and structured finance and Islamic banking.