Fitch affirms AA- rating to Emirates Development Bank with stable outlook

The ranking is based on EDB’s new strategic direction launched in March last year

Abu Dhabi-based Emirates Development Bank has allocated Dh30 billion ($8.2bn) to facilitate direct and indirect lending to more than 13,500 companies by 2025. Bloomberg

Ratings agency Fitch has affirmed Emirates Development Bank’s long-term issuer ratings as AA- with a stable outlook based on the lender's new strategy launched last year.

The AA- rating signifies that the bank has very low credit risk.

EDB, founded in 2011 through the merger of Emirates Industrial Bank and Real Estate bank, is playing a key role in supporting the UAE's industrial sector through financing programmes.

The bank’s new strategy was launched in March 2021 to support the UAE’s industrial development, accelerate the adoption of advanced technologies and empower the growth of small and medium enterprises in the country.

The rating demonstrates “clear confidence in the bank’s leadership and operational excellence, as well as in the continued strength of the UAE economy”, Dr Sultan Al Jaber, the UAE’s Minister of Industry and Advanced Technology and chairman of EDB, said.

“The AA- rating is a reflection of EDB’s strong performance over the last 12 months, under a new strategic direction that has transformed it into a key enabler of the UAE’s industrial transformation and economic diversification.”

EDB focuses on the growth and development of large corporations and SMEs in five key sectors including manufacturing, advanced technology, infrastructure, health care and food security. The lender has allocated Dh30 billion ($8.2bn) to facilitate direct and indirect lending to more than 13,500 companies in these priority sectors by 2025.

Earlier this month, EDB said it contributed Dh1.91bn to the UAE’s gross domestic product over the past 12 months.

EDB is playing a “pivotal” role in supporting the national economic agenda by offering flexible financing solutions to SMEs and large corporates in priority sectors, and “by applying specialised mechanisms that evaluate not just credit risk and project viability but also developmental impact”, Dr Al Jaber said.

“In this way EDB is not merely acting as a bank, but as an essential tool for the UAE's economic development.”

This week, EDB signed an initial agreement with Food Tech Valley to provide financing for SMEs and start-ups operating within the Dubai food technology hub.

It also entered an agreement with the Abu Dhabi Investment Office last October to boost foreign direct investment and attract more businesses to the capital. In September, it teamed up with Ajman Free Zone to support the development of Emirati-led SMEs.

“We are pleased to see that Fitch has affirmed Emirates Development Bank’s AA- rating, which underlines their continued confidence in our strategic direction and operational performance,” EDB’s chief executive Ahmed Mohamed Al Naqbi said.

“Our model has proven its resilience and agility. The AA- rating affirmation reflects EDB’s capital base strength and forecasted growth in its lending operations,” Mr Al Naqbi said.