GFH Financial Group announced today that Standard & Poor’s Global Ratings has upgraded the group’s long-term issuer credit rating to “B” from “B”, with a stable outlook.
At the same time, the agency upgraded the credit rating of the sukuk issued by GFH Sukuk Limited to “B” from “B-“.
The agency’s report showed that GFH’s revenues proved resilient during the period 2020-2022, and indicated that the return on equity improved to 8.6% during the first nine months of 2022.
Despite the pressure on the treasury activities of the group due to the high interest rates, the report also indicated the ability of GFH to achieve good returns from the investment banking business, by benefiting from its activity in the real estate sector in Europe and the United States and its stable performance in the commercial banking activity following the restoration Structured in 2020. According to the rating agency, this stable outlook reflects the view that GFH can limit exposure to real estate assets while maintaining moderate capitalization over the next 12-18 months.
The agency indicated that the macroeconomic environment will continue to support the group’s activities, and the report expects that oil prices will remain high during the period 2023-2024, which supports the abundance of liquidity in the Gulf Cooperation Council region. On the other hand, this is expected to maintain high demand for alternative investments, support for commercial banking services, and is also likely to maintain the relative stability of regional financial markets despite the rise in interest rates.
