Meed | UAE banks dig in for new era

UAE banks dig in for new era

11 April 2025

Gulf decision makers, like their counterparts elsewhere in the world, are gauging the potential impact of the world’s new tariff regime.

Amid the global economic turmoil emanating from Washington DC, UAE banks have reason to be confident about their prospects of withstanding the negative effects, after a strong 2024 that saw double-digit credit growth and solid profits across the board.

Full-year loan growth stood at 11% in 2024, notes ratings agency Fitch Ratings, while UAE banks’ profits reached a record-high level, with a 19.1% return on average equity.

Surprising success

Loan growth surprised on the upside, reflecting stronger activity from government-related entities (GREs), which has provided good business for Emirati banks. For example, majority government-owned Emirates NBD had almost one-quarter of its loan book exposed to the Dubai government and its GREs.

The broader outlook is positive for UAE banks in 2025. Amid healthy operating conditions and robust liquidity, lending growth should remain close to double figures this year.

The combined net income of Fitch-rated banks was AED80bn ($19.8bn) in 2024, up from AED76bn ($18.8bn) in 2023. This rise was driven by a 10% expansion of the banks’ pre-impairment operating profit, contained loan impairment charges – due to the favourable operating environment – and strong coverage of already crystallised problem loans at most banks, said Fitch Ratings.

The UAE’s largest bank, First Abu Dhabi Bank (FAB), reported a 13% year-on-year increase in pre-tax profits to AED19bn ($4.7bn), supported by revenue growth of 15%.

“UAE banks are at the top of the cycle,” says Anton Lopatin, UAE bank analyst at Fitch Ratings. “At Fitch, we’ve upgraded a lot of standalone ratings for banks in the last 24 months. Together with other factors that reflected that in the last two years we have seen some the highest profits ever in the UAE, because of the strong liquidity and the healthy economic environment.”

Although profitability is expected to decrease marginally in 2025, UAE banks will continue to benefit from solid internal capital generation and high shareholder support, according to S&P Global, another ratings agency.

Taxes, rates and regulations

UAE banks, like other companies active in the country, have also had to cope with the introduction of corporate tax, imposed in mid-2003 at an average 9% rate. Even so, UAE banks realised a high return on equity in 2024, despite it being the first full year in which banks paid corporate tax.

UAE banks have benefited from the higher-for-longer interest rates, an avenue of earnings that is gradually closing off in light of the US Federal Reserve’s protracted series of rate cuts. Nonetheless, analysts see the impact remaining supportive through 2025.

“The market consensus is that in 2025, there will be a maximum of two cuts in interest rates. That would mean banks would likely report another return on average equity close to 20% again, in line with what we saw last year,” says Lopatin.

Another source of support is the new credit risk management standards introduced by the UAE Central Bank in November, which are likely to strengthen banks’ long-term creditworthiness.

“From a ratings agency perspective, this is positive, as … target banks have to become more prudent in terms of how they classify loans, and how they book provisions against new impairment cases. This means they should be more conservative than they used to be,” says Lopatin.

The standards are aimed at improving the transparency of the banks’ asset quality and ensure stronger provision coverage for problem loans. Consequently, capital and profitability metrics should face less pressure in times of stress, notes Fitch.

“The Central Bank of the UAE targets the sector average impaired loan ratio to be less than 5% in the long-term. The current average is 4%, but we are in the positive part of the cycle,” says Lopatin.

Some banks may report higher Stage 2 or Stage 3 loans ratios due to the new standards, but Fitch maintains its forecast sector-average impaired loans ratio at 4% for 2025 because the impact on most large and medium-sized banks is likely to be limited, and robust growth should continue to dilute increases in Stage 3 loan ratios.

Pressure has been exerted on banks to offload some of their bad loans, most notably in Abu Dhabi.

The process got rolling in 2023, when Abu Dhabi Commercial Bank (ADCB) offloaded a $1.1bn loan portfolio to US investment fund Davidson Kempner, as part of a move to rid its balance sheet of corporate defaults. The lender is now looking to package off more non-performing loans by the end of 2025 and is reported to be in the early stages of studying such a deal.

In January, FAB also announced its intention to offload some impaired loans and is reportedly looking to sell its portfolio of non-performing loans worth about $800m to Deutsche Bank. This process mirrors what is happening in Saudi Arabia, where the authorities want banks to securitise some of the impaired loans.

Opportunities abroad

While the domestic economic upturn and the servicing of GREs’ credit needs will underpin future Emirati bank growth, lenders also continue to look out for new opportunities beyond the GCC home market.

Turkiye is one of the more promising prospects for UAE banks to grow their footprints. Although an attempt last year by FAB to acquire a stake in the country’s fourth-largest private bank, Yapi Kredi, did not go through, in January Dubai Islamic Bank announced an increase in its shareholding in Turkish financial services provider TOM Group from 20% to 25%.

Meanwhile, Emirates NBD and FAB acted as coordinators and bookrunners on a $1.2bn loan for Turkiye Wealth Fund in March of this year. The sovereign fund raised a two-year syndicated loan from 20 banks.

Overseas expansion, mixed with continued domestic credit growth opportunities, should help UAE lenders maintain their recent performances – whatever global headwinds result from US President Donald Trump’s new era of trade barriers.

MEED’s May 2025 report on the UAE includes:

> GOVERNMENT & ECONOMY: UAE looks to economic longevity
> BANKING: UAE banks dig in for new era
> UPSTREAM: Adnoc in cruise control with oil and gas targets
> DOWNSTREAM: Abu Dhabi chemicals sector sees relentless growth
> POWER: AI accelerates UAE power generation projects sector
> CONSTRUCTION: Dubai construction continues to lead region
> TRANSPORT: UAE accelerates its $60bn transport push

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James Gavin

Exclusive from Meed

Jedco maps next phase of Jeddah airport expansion
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22 September 2026
Oman tenders Thumrait Industrial City infrastructure
22 September 2026
Kuwait halves drilling contractor pool
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Abu Dhabi expects 45% emissions cut as electricity demand rises
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Jedco maps next phase of Jeddah airport expansion
22 September 2026

Jeddah Airports Company (Jedco) has outlined plans for the next phase of expansion at King Abdulaziz International airport (KAIA) in Jeddah.

The programme comprises six upcoming contractor packages spanning airside works, terminal upgrades and utilities as Jedco advances its long-term expansion plans.

The opportunities include airfield rehabilitation; a five-year construction framework covering multiple workstreams and facility types; a Terminal 3A (T3A) package; Terminal 1 (T1) optimisation; a fuel farm; and Concourse C works.

The packages cover terminal buildings and ancillary facilities, runways, taxiways and aprons, hangars, fuel systems, airside facilities, supporting infrastructure and utility networks.

Tendering and award activity will be staggered over the next two years. Airfield rehabilitation is targeted for Q3 2026. The construction framework is scheduled for Q4 2026 and will run for five years.

The T3A package is planned for Q1 2027 and will be delivered under an early contractor involvement contract. Local contractors are encouraged to bid as part of a joint venture with an experienced international partner.

T1 optimisation is planned for Q4 2027, the fuel farm for Q2 2027, and Concourse C – currently the latest of the six milestones – for Q2 2028.

The new packages add detail to Jedco’s wider expansion plans disclosed in 2023, when it was reported that the company would invest SR115bn ($31bn) to increase KAIA’s capacity to 114 million passengers a year, with an overall completion target of 2031.

Jedco has recently awarded several significant contracts linked to the airport’s upgrade programme.

In November 2024, a joint venture of local Algihaz Contracting and Turkey’s TAV was awarded a contract to rehabilitate the South Terminal to serve Umrah and Hajj pilgrims, with Singapore’s Surbana Jurong acting as consultant.

Earlier that year, Jedco also awarded France’s Alstom a contract to increase the capacity of the Innovia automated people mover at Terminal 1, including new cars and upgrades to signalling, communications and controls.

Surbana Jurong is expected to play a leading role in future KAIA expansion plans and is currently providing technical advisory and project management consultancy for more than 100 capital projects for Jedco, valued at over SR6bn ($1.6bn).

These upgrades are expected to boost KAIA’s annual capacity in line with Saudi Arabia’s Vision 2030 and National Aviation Strategy, enhancing the experience for domestic travellers and millions of Hajj and Umrah pilgrims.

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Yasir Iqbal

Contractor wins $105m Medina university hospital deal

22 September 2026

Riyadh-based construction firm Al-Mansouria General Contracting Company has been awarded a SR396m ($105.6m) contract to complete the remaining construction works on the Taiba University Hospital project in Medina.

The contract scope includes structural completion, remaining civil works, mechanical, electrical and plumbing installations, specialised clinical fit-outs and medical gas infrastructure to bring the long-stalled facility into operation.

Located on King Khalid Road along Medina’s Third Ring Road, the teaching hospital will have a capacity of 563 beds.

The contract duration is three years, with delivery targeted for late 2029.

The latest award follows a prolonged procurement cycle that began more than a decade ago as part of a public budget drive to expand Saudi Arabia’s higher education infrastructure.

The project’s first phase was initially signed in December 2011 with local firm Al-Muhaidib Contracting under a SR500m ($133.3m) contract.

Groundbreaking for the eight-storey complex took place in July 2013. The project covers a gross floor area of more than 200,000 square metres.

Progress stalled shortly thereafter due to reported structural delays and the reallocation of public capital budgets across the kingdom’s social infrastructure pipeline.

READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:

> AGENDA: Gulf nuclear revival takes shape

> MARKET FOCUS: Kuwait keeps dealmaking alive under fire

> INDUSTRY REPORT: Gas processing takes centre stage in Mena region

> INTERVIEW: Emsteel persists with business productivity and efficiency

> TUNNELS: The Gulf’s next construction boom is happening underground

To see previous issues of MEED Business Review, please click here

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Yasir Iqbal

Oman tenders Thumrait Industrial City infrastructure
22 September 2026

Oman’s Public Establishment for Industrial Estates (Madayn) has tendered an estimated RO15m ($39m) contract to develop infrastructure for Thumrait Industrial City.

The tender was issued on 14 September, with bids due by 12 November.

The scope covers site-wide utilities and services, including an internal road network, stormwater channels and culverts. It also includes installing sewerage and water networks, along with landscaping works.

In addition, Madayn intends to build plug-and-play industrial units and a facilities building.

The first phase of the development will cover about 120,000 square metres (sq m).

Thumrait Industrial City is located in Oman’s Dhofar Governorate and spans an area of more than four million sq m.

The project location is close to concession blocks, quarry sites and the Najd agricultural areas. It is positioned to attract industrial investments in sectors such as mining and minerals processing (including gypsum and cement), food production, and a range of light and general manufacturing activities.

In March, Madayn said it is preparing to invest more than RO245m ($637m) to upgrade and expand infrastructure across its industrial cities between 2026 and 2030, as part of efforts to attract new investment and advance economic diversification.

According to media reports, Madayn chief executive Dawood Bin Salim Al-Hadabi said the programme is part of an expanded, phased plan aligned with Oman Vision 2040 and the authority’s long-term Madayn 2040 strategy.

The objective is to deepen Oman’s industrial base and spread growth across the sultanate’s governorates.

Madayn said the pipeline comprises about 90 strategic projects to improve industrial-city infrastructure, extend serviced land and increase the overall ease of doing business for investors.

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Yasir Iqbal
Kuwait halves drilling contractor pool
22 September 2026
State-owned upstream operator Kuwait Oil Company (KOC) has reduced the number of approved contractors for onshore drilling and shallow-well maintenance from 51 to 24.

Firms that are no longer qualified include major contractors such as Italy’s Saipem, Oklahoma-based Helmerich & Payne and Houston-based Patterson-UTI Energy.

The latest list still includes a wide range of Kuwaiti, regional and international companies, according to the latest update on its electronic system, published on 21 September 2026.

The full list of contractors that are now qualified to participate in tenders is:
- Burgan Company for Well Drilling, Trading & Maintenance (Kuwait)
- Kuwait Drilling Company (Kuwait)
- Sun Drilling Kuwait (Kuwait)
- TDL Kuwait for Oil Rigs & Natural Gas Extraction Activities, Services and Facilities (Kuwait)
- United Precision Drilling (Kuwait)
- Abraj Energy Services (Oman)
- Adnoc Drilling Company (UAE)
- Arabian Drilling Company (Saudi Arabia)
- Anton Oilfield Services (China)
- China Oilfield Services (China)
- Egyptian Drilling Company (Egypt)
- CNPC Bohai Drilling Engineering Company (China)
- Great Wall Drilling Company (China)
- John Energy (India)
- Kerui Oilfield Service (China)
- KCA Deutag Drilling (Germany)
- Mohammed Al-Barwani Petroleum Services (Oman)
- Nabors Drilling International (US)
- National Drilling & Services Company (Oman)
- Sea & Land Drilling Contractors (Oman)
- Sinopec International Petroleum Service Corporation (China)
- Karamay Jianye Energy (China)
- Modern Drilling Company (Egypt)
- Grey Wolf Drilling International (US)
An earlier list, which was published on 11 February, included 51 qualified companies.

The reduction in qualified drilling contractors follows KOC’s notice on 27 April this year, informing existing qualified contractors that they would need to reapply.
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Wil Crisp

Abu Dhabi expects 45% emissions cut as electricity demand rises

21 September 2026

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Abu Dhabi-based Emirates Water & Electricity Company (Ewec) expects carbon emissions from power and water production to fall by more than 45% by 2035 as the UAE expands renewable energy and reverse osmosis (RO) desalination.

The state offtaker's latest long-term system planning forecasts emissions will decline from about 42 million tonnes in 2019 to approximately 23 million tonnes in 2035.

The reduction is expected despite annual electricity demand that is forecast to rise by about 70% in 2026-33.

Ewec said the expansion of renewable energy and the shift towards RO desalination will be the principal drivers of the reduction.

The company plans to increase Abu Dhabi's solar capacity to 14GW by 2030 and more than 35GW by 2035. This will be supported by up to 15GW of battery storage capacity.

According to regional project tracker MEED Projects, Ewec has over $16bn-worth of power and water projects in the execution stage as part of its long-term procurement programme to increase renewable energy and low-carbon water production capacity.

This includes a 5.2GW Abu Dhabi solar and battery energy storage system (bess) round-the-clock renewable energy project, as well as three 1.5GW solar photovoltaic independent power projects (IPP): Al-Ajban, Al-Khazna and Al-Zarraf.

It also comprises the 1GW Al-Dhafra open-cycle gas turbine power plant, the 2.5GW Taweelah C combined-cycle gas turbine (CCGT) plant and a separate 400MW bess IPP.

As previously reported, it is expected that the developer's agreement for the 3.3GW Al-Nouf 1 CCGT IPP will be signed by the end of the year, while contractors are preparing to submit bids for a separate 2.6GW power plant project in Ajman.

The expansion of solar and battery storage is expected to reduce the system's reliance on gas-fired generation. However, gas-fired generation will continue to provide flexibility to support the system and balance intermittent renewable power output, according to Ewec.

The offtaker also expects RO desalination to account for more than 95% of total water production by 2035, with the procurement programme supporting the Abu Dhabi Department of Energy's Clean Energy Strategic Target 2035 for electricity production and the UAE Net Zero by 2050 Strategy.