The Kuwait-based Gulf Bank has had its long-term deposit rating upgraded to Baa1 from Baa2 by the US-based rating agency Moody’s. The bank’s standalone bank financial strength rating has been revised to D from D-.

The outlook for the bank’s long-term ratings remains positive.

The upgrade is driven by improvements to the bank’s asset quality and provisioning coverage, as well as the improvement of the bank’s capital buffers to levels seen before 2008-09 global financial crisis.

At the end of 2013, the bank’s ratio of non-performing loans to gross loans declined to 6.7 per cent from more than 30 per cent at the end of 2009.

Gulf Bank suffered large losses from transactions in complex derivative instruments in 2008 and concentrated lending to the real estate market.