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12 December 2019

IIRA reaffirms GFH Financial Group’s BB / B fiduciary ratings

The investment bank’s assigned ratings consider its association with UAE-based Abu Dhabi Financial Group as a controlling shareholder.


by Kudakwashe Muzoriwa

Islamic International Rating Agency (IIRA) has reaffirmed its ‘BB/B’ international scale ratings at GFH Financial Group (GFH), with a stable outlook.

The rating agency stated that GFH’s key business lines include investment banking, real estate development as well as the recently expanded treasury and proprietary investments and commercial banking undertaken through its 55.4 per cent holding of Bahrain-based Khaleeji Commercial Bank.

Similarly, a large element of GFH’s investments book is real estate assets that are at various stages of development, although this concentration is reducing with a recent build-up of investment in treasury products and increasing investments in volatility resistant sectors such as education and healthcare.

The group’s capital adequacy ratio reduced to 14.5 per cent in Q3 2019, remains comfortably above the Central Bank of Bahrain minimum of 12.5 per cent despite the increased exposure to the increasingly faltering regional real estate assets and reduced internal capital generation.

The bank’s cost rationalisation measures among other strategies are expected to result in boosting of profitability over the coming periods, although the GFH’s Bahrain-based retail banking subsidiary operations have showed slower business growth coupled with weaker profitability metrics in 2018.

RELATED STORIES: Islamic International Rating Agency Khaleeji Commercial Bank GFH Financial Group





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