Mubasher: Fitch Ratings affirmed its ‘B’ long- and short-term issuer default ratings (IDR) for GFH Financial Group, with a stable outlook on the long-term IDR.

Fitch also maintained the senior unsecured long-term rating of the $500 million sukuk due 2025 issued through GFH Sukuk Company Limited (GFH SCL) at 'B' with a recovery rating of 'RR4'.

The international rating agency attributed the reaffirmation to the group’s success in developing the business model towards a more stable fee-based revenue stream, according to a press release.

The report highlighted the management’s progress in implementing a de-risking strategy during recent years. This is in addition to the company’s ability to boost its treasury activities, increase fee-generative business from investment management, and cut legacy illiquid real estate investments.

GFH’s overall profitability was kept moderate, while capitalisation and liquidity were noted to be in line with and above regulatory standards, respectively.

Fitch highlighted recent acquisitions, including Roebuck Asset Management in the UK and Student Quarters Asset Management, and Big Sky Asset Management in the US.  

Damian White, Group Chief Financial Institutions and Proprietary Investments of GFH, commented: “The report highlights ongoing market recognition of the success of GFH’s strategy in diversifying our business and revenue streams and maintaining resilience across our core focus areas, from commercial and investment banking to growth in treasury and asset management.”

“We will continue to pursue expansion in key areas and markets with the aim of further strengthening our performance and building our portfolio of income-generating assets,” White added.

Last December, S&P Global Ratings upgraded GFH’s long-term issuer credit rating to ‘B’ from ‘B-’, with a stable outlook.

During the first quarter (Q1) of 2023, the group recorded 25.60% higher net profits attributable to shareholders at $24.01 million, versus $19.12 million in Q1-22.

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.