Fitch affirms AA rating for Emirates Development Bank

Wam

• Bank contributed $1.1bn to GDP
• Outlook is ‘stable’, says Fitch
• Lender’s SME financing up 72%

Fitch has affirmed the credit rating of Emirates Development Bank after the lender’s contribution to the UAE’s economy rose by 80 percent to more than AED4 billion ($1.1 billion) last year.

The agency’s AA rating came with a stable outlook, indicating confidence in the bank’s long-term ability to maintain its financial stability.

In its report, Fitch highlighted the EDB’s “well-defined policy and development role in the UAE” and operating conditions that the agency expects to remain strong in 2024. 

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The EDB reported a total GDP contribution of AED4.3 billion last year, along with a 72 percent increase in financing for small and medium-sized enterprises compared with 2022. This has risen to AED3.3 billion.

Since 2021, when the bank launched a five-year strategy to become a financial engine of the UAE government’s industrial and economic diversification agenda, total loans financed are close to AED9 billion and more than 17,200 jobs have been created.

Under the strategy, the EDB has allocated a total of AED30 billion to support 13,500 companies in sectors such as manufacturing, advanced technology, healthcare, renewables and food security by 2026.

CEO Ahmed Mohamed Al Naqbi described the Fitch rating as a “strong affirmation” of its efforts to prioritise sustainable economic development over profitability.

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Operation 300 Billion, a 10-year programme that aims to increase the contribution of the industrial sector to the UAE’s economy to AED300 billion by 2031, was also launched in 2021. The ministry of industry said its contribution was expected to reach AED197 billion last year.

The EDB was set up in 2015 and has developed a developmental impact scorecard to assess a company or project’s eligibility for finance. 

Last year it launched five programmes with total financing of more than AED500 million, including two dedicated to financing agricultural technology and solar energy projects. 

“We consider it a top priority to enable the growth of the UAE by driving innovation and working with our partners to create a positive economic, social, and environmental impact,” added Al Naqbi.