Fitch Ratings upgrades Gulf Bank’s viability rating to ‘bb+’ from ‘bb’

KUWAIT: Fitch Ratings has upgraded Gulf Bank’s Viability Rating to ‘bb+’ from ‘bb’ and affirmed the bank’s Long-Term Issuer Default Rating at ‘A+’ with a Stable Outlook.

According to Fitch Ratings, the viability rating upgrade reflects Gulf Bank’s strong strategy execution and improving underwriting standards and asset-quality. Fitch Rating mentioned that Gulf Bank continues to benefit from a fairly stable operating environment in Kuwait despite the economic impact of low oil prices. The bank is exposed to slower economic growth, but Fitch believes that the government’s continuing capital spending plans will partially offset the pressures. In their recent report, Fitch stated that Gulf Bank has an adequate franchise in Kuwait, both in retail and corporate banking. Gulf Bank’s large branch network and good brand support the bank’s distribution capabilities. The bank’s business model is domestic-led.

Fitch added that the bank has a good and competent management team, well-experienced in local and regional banking, with an improving record of strategy execution in Kuwait. The bank’s strategic objectives are consistent and relatively cautious.

Gulf Bank continues to enjoy favorable ratings from the top international credit rating agencies. In addition to the most recent viability rating upgrade and affirmations from Fitch Ratings. S&P Global Ratings revised their outlook on the Bank to “Positive” from “Stable” and affirmed its issuer credit rating at “A-” in June 2017. Similarly, Moody’s Investors Service affirmed the bank’s “A3” long-term deposits rating and “Stable” outlook in May 2017. Furthermore, Capital Intelligence also affirmed the Bank’s Financial Strength Rating at “BBB+” and the subordinated bond rating at “BBB” both with “Stable” outlooks in May 2017.