Standard and Poor’s Affirms Gulf Bank Rating at “A-”
Kuwait, 22 July 2020: S&P Global Ratings has affirmed Gulf Bank’s Issuer Credit rating at A-/A-2.
According to the recently published S&P Global Ratings commentary, the outlook revision follows the same action on Kuwait on July 17, 2020. The sovereign action primarily reflects the risks stemming from fiscal pressure including the likely depletion of the General Reserve Fund, the government's main source of budget funding, while alternative financing arrangements are not yet in place.
S&P Global Ratings stated that Gulf bank's financial profile is resilient to the current economic downturn, assuming a global recovery in 2021. Other positive factors that has led to the A-/A-2 long term and short term issuer credit rating affirmation includes the Bank’s significant accumulated provisions (a coverage ratio of almost 500% at year-end 2019), sound market position as the fourth largest commercial bank in Kuwait factors in its improving revenue and business stability, comfortable forecasted risk-adjusted capital ratio and domestically comparable funding and liquidity levels.
Commenting on S&P’s credit rating announcement, Ms. Dalal Al-Dousari, Gulf Bank’s Head of Investor Relations said: “We are pleased to receive the affirmation of our Bank’s Issuer Credit Rating at “A-” by S&P Global Ratings. “The Bank’s revised outlook from Stable to Negative is mainly reflecting the recent Kuwait sovereign action, which was expected, as Gulf Bank is considered a systematically important Bank and as part of the Kuwaiti banking system, it’s naturally affected by the local economic situation. We hope that the economic downside pressures mainly resulting from the Covid-19 pandemic and other fiscal pressures will be elevated within the foreseeable future.” Added Al-Dousari.
Gulf Bank continues to be well recognized in terms of its credit worthiness and financial strength internationally as it is rated “A” by all four leading credit rating agencies. In addition to S&P’s recent rating action, Gulf Bank has a Long-term IDR of “A+” with a “Stable” Outlook by Fitch Ratings, a Long-Term Deposits Rating of “A3” with a “Stable” Outlook by Moody’s Investor Services and a Long-term Foreign Currency Rating of “A+” with a “Stable” Outlook by Capital Intelligence Ratings.