UAE banks get ratings upgrades from global agencies
Two prominent UAE banks, Abu Dhabi Commercial Bank (ADCB) and RAKBANK, have received positive ratings updates from leading credit agencies, reflecting their strong financial positions and strategic transformations.
ADCB has achieved an upgrade in its long-term issuer credit rating to 'A+' from 'A' with a 'stable' outlook by S&P Global Ratings. This advancement places ADCB among the top three rated banks in the Mena region. The upgrade is attributed to the bank's robust financial health, high asset quality, and sound earnings generation. S&P noted that ADCB's capitalisation remains a key strength, supported by improved risk management practices and a contained risk appetite.
"We believe the bank's asset quality will continue to benefit from the strengthening of its risk management culture," S&P stated in its assessment. ADCB aims to sustain its growth trajectory with a target of doubling its net profit to Dh20 billion within five years. Since implementing its previous strategy in 2020, ADCB has reported a compound annual growth rate (CAGR) of 28 per cent in profit before tax, exceeding Dh10 billion in 2024, a year ahead of schedule. Additionally, the bank's assets have surged by 59 per cent since 2020, surpassing Dh650 billion.
Meanwhile, RAKBank has received affirmation of its BBB+ long-term issuer default rating (IDR) from Fitch Ratings, along with an upgrade in its Viability Rating (VR) to bbb-. This recognition underscores RAKBank's strong capital position and enhanced asset quality, driven by a strategic shift into wholesale banking and treasury operations. The bank's diversification efforts have improved income stability and reduced reliance on traditional retail lending.
Fitch highlighted RAKBank's effective risk management, reflected in a steady decline in non-performing loans (NPLs) and high loan-loss coverage ratios. The bank's strong capital buffer and stable deposit base further reinforce its resilience.
"The upgrade in our Viability Rating reflects the disciplined execution of our transformation strategy, focusing on diversification, digital innovation, and customer-centric growth," said Jaffer Nini, group CFO of RAKBank.
Both banks are committed to accelerating their digital transformation and optimising their portfolios to expand in high-growth sectors. ADCB's significant balance sheet expansion, along with RAKBank's focus on wholesale banking, positions them well for continued success in the competitive UAE financial landscape.
Banking analysts said the upgrades signify a positive outlook for the UAE banking sector, highlighting its resilience and capacity for growth amid evolving economic conditions.
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