Standard & Poor's upgrades GIB's long-term foreign currency rating to A-

At the same time Standard & Poor's has reaffirmed GIB's short-term foreign currency rating at "A2". The outlook is stable.

A statement issued by Standard & Poor's explained that: "The upgrade reflects GIB's enhanced merchant banking franchise in the Arabian Gulf, improving profitability, streamlined strategy, and improving asset quality". Standard & Poor's further commented that: "We expect GIB to continue to benefit from the commitment of its shareholders and a strong commercial position in the regional banking market".

Dr. Khaled M. Al-Fayez, GIB's Chief Executive Officer, stated that he was delighted with the upgrade of the bank's rating. He commented that GIB was among the first Gulf banks to be assigned investment grade credit ratings by all of the major international credit rating agencies and is one of the highest rated financial institutions in the Middle East.

Dr. Al-Fayez stated: "During the last 18 months, GIB has been upgraded by all three major international credit rating agencies, Fitch, Moody's and Standard & Poor's. The upgrades in GIB's ratings provide an important independent validation of the bank's GCC-focused merchant banking strategy. The upgrade in the Standard & Poor's rating to A-, which follows an upgrade in the Fitch rating to A- in December 2003, also represents a transition across an important threshold as recognised by the new Basel II capital adequacy proposals which assign significantly lower capital requirements to banks rated A- and above". Dr. Al-Fayez explained that under the new Basel II capital adequacy guidelines, capital requirements will be determined based on credit ratings. It is therefore important that banks strive to achieve the highest possible credit ratings.