Dubai: GFH Financial Group (GFH) said Fitch Ratings has upgraded its Long-term Issuer Default Rating (IDR) from “B-” to “B” with a positive outlook.
The upgrade is a reflection of GFH’s improved financial position following its strengthening of its capital position and reducing associated legacy uncertainties, the company said, quoting the ratings agency in a statement.
The positive outlook further reflects Fitch’s view of the measures GFH’s management has taken to reshape its business model towards a greater focus on income-generating investments which have and are expected to result in more consistent profitability. These include an increasing and generally more stable revenue contribution from commercial banking activities. Also noted as a positive factor by Fitch is Abu Dhabi Financial Group’s presence as a significant shareholder in the Group.
Fitch further opined that the ratings could be upgraded if GFH demonstrates a track record of stable profitability and cash flows from its business model. Successful development and exit from illiquid legacy real estate projects could also be positive for the ratings, the company said.
“These ratings more broadly also serve to reaffirm the strength and success of our strategy and the direction in which we are taking our business. We look forward to further enhanced performance and results as we build upon these foundations,” Hesham Alrayes, CEO of GFH, said in a statement.
