Banks across the UAE, Saudi Arabia, and much of the Middle East are gearing up for a surge in credit growth next year, fueled by resilient economic momentum, according to Fitch Ratings.
Despite the prospect of lower interest rates, lenders are expected to post solid earnings, supported by strong liquidity, stable asset quality, and capital buffers that match their risk profiles.
“Profitability is likely to remain healthy even with softer rates, while asset quality and liquidity are expected to stay robust,” Fitch noted.
The majority of banks in the region carry low to moderate default risk, with roughly two-thirds holding investment-grade Issuer Default Ratings. Much of this resilience stems from perceived government backing, alongside the banks’ own credit strength.
Analysts say the outlook underscores a banking sector that is both well-capitalized and poised to expand its lending footprint in the year ahead.
