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S&P upgrades GFH’s ratings to ‘B’; outlook stable

S&P upgrades GFH’s ratings to ‘B’; outlook stable
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Mubasher: S&P Global Ratings has upgraded the long-term issuer credit rating of GFH Financial Group to ‘B’ from ‘B-’, with a stable outlook, according to a press release.

The agency also advanced the credit ratings on the Sukuk issued by GFH Sukuk Company to ‘B’ from ‘B-’. The rating upgrades highlight GFH's powerful business and financial performance.

The report indicated that GFH revenues proved resilient during the 2020-2022 period, adding that the return on equity increased to 8.60% over the first nine months (9M) of 2022.

Although hiking interest rates pressured GFH’s treasury activities, the group managed to deliver positive investment banking revenue. S&P attributed this to the company's real estate specialisation in Europe and the US, as well as its stable commercial banking performance after a restructuring in 2020.

Furthermore, the stable outlook reflects the rating agency's expectation that GFH can lower its exposure to real estate assets while maintaining a moderate cap over the coming 12-18 months.

S&P elaborated that the macroeconomic environment will continue to back GFH's activities. It also projected that oil prices will remain high through 2023-2024, which would anchor abundant liquidity in the GCC region.

This is forecast to maintain the surging demands for alternative investments, support commercial banking, and likely preserve regional money markets relatively steady despite higher interest rates.

Salem Patel, Chief Investment Officer of Debt and Capital Markets at GFH, said: “Despite challenging market conditions, our performance across each of our core business lines has remained resilient, enabling us to deliver solid returns for the Group, our shareholders, and investors.”

In 9M-22, GFH logged net profits attributable to the shareholders worth $66.23 million, up 9.80% year-on-year (YoY) from $60.34 million.

It is worth mentioning that besides trading on Dubai Financial Market (DFM), the financial group is cross-listed on Abu Dhabi Securities Exchange (ADX), Bahrain Bourse (BHB), and Boursa Kuwait.