Kuwait-based Gulf Investment Corporation (GIC) and Bahrain-based Gulf International Bank (GIB) were both downgraded to BBB+ from A-, and were also placed on negative outlook.

Paul-Henri Pruvost, S&P banking analyst, says of the change to GIC's rating that "the rating action reflects the material negative impact on GIC's business and financial profile of the global and regional market conditions.”

S&P adds that the outlook for both banks was now weaker than it had previously thought, and that funding pressures were still an area of concern.

GIC and GIB are both owned by the governments of the six GCC countries.