Saudi Arabia and the UAE are poised for robust credit growth in 2025, driven by sustained high oil prices and the continued expansion of their non-oil sectors, according to Fitch Ratings. This trend reflects the broader regional recovery as economic conditions improve, boosting lending activity across the Middle East.
Fitch’s outlook for Middle Eastern banks remains neutral, supported by sovereign backing and creditworthiness. Nearly two-thirds of Fitch-assigned Issuer Default Ratings (IDRs) for regional banks are investment grade, highlighting the resilience of financial institutions in the region.
Key Regional Trends
While Saudi Arabia and the UAE are set to lead in credit growth, other countries in the region are also expected to experience rising lending activity. In Egypt, banks are projected to see a positive outlook, bolstered by factors including:
- Real GDP growth,
- A projected decline in consumer prices,
- Strengthening of the domestic currency, and
- Improved investor sentiment.
Profitability and Stability
Banks across the region are forecast to report sound profitability in 2025, reflecting the improving economic environment and robust lending activities. Fitch’s analysis highlights the growing stability in the Middle Eastern banking sector as non-oil diversification strategies gain traction, particularly in Saudi Arabia and the UAE.
