Ratings Elements

Ratings Drivers

Fitch has upgraded GB's Viability Rating (VR) to 'bb' from 'bb-' due to its stronger company profile post restructuring. The bank has completed a wide ranging restructuring and worked out previously significant volumes of impaired loans, since the capital support it received by the Kuwait Investment Authority in 2008 following large derivatives losses. The upgrade also reflects GB's lower risk appetite.

GB's improved company profile, including a broader franchise, underpins its VR. Asset quality is gradually improving, and the bank has significantly reduced its NPL ratio through recoveries and write-offs. Nonetheless, loan concentration by borrower remains high. GB's restructuring focuses primarily on strengthening its business and retail franchises, and is reducing its risk appetite, in Fitch's view.

GB's VR could be further upgraded if its single name concentrations were reduced significantly and from better overall asset quality. On the other hand, a change in the bank's current conservative expansion strategy, such as rapid growth internationally, and weaker underwriting standards could negatively affect the VR.