Kuwait – Mubasher: S&P Global Ratings has affirmed “A-/A-2” long- and short-term counterparty credit ratings on Kuwait-based Gulf Bank, according to a bourse statement.

The rating agency also revised its outlook on the bank to “positive” from “stable”.

The bank has improved its capitalization and reduced the risk on its loan book over the past three years.

S&P believes that “the bank can maintain a risk-adjusted capital (RAC) ratio above 10%, assuming a normalizing cost of risk, a marginal improvement in margins, and growth of more than 5% in lending over the next two years”. 

The bank's core earnings are expected to increase to about 1% of adjusted assets by the end of 2018, yet below that of peers. In addition, broad liquid assets sufficiently cover short-term wholesale funding needs by 1.44x on average over the past five years.

Gulf Bank's funding and liquidity profile will remain resilient to the low oil-price environment.