Fitch affirms Emirates Development Bank’s ‘AA-‘ credit rating with a stable outlook
In a recent development, Fitch Ratings has affirmed Emirates Development Bank’s ('EDB' or 'the Bank') credit rating at 'AA-', signaling the bank's robust creditworthiness and strategic significance to the UAE's national agenda. The 'stable' outlook accompanying the rating underscores confidence in EDB's ability to maintain financial stability over the long term.
Fitch Ratings underscored EDB's pivotal role in the UAE's economic landscape, citing its well-defined policy and development role within the nation. The agency expects EDB to continue operating under favorable conditions in 2024, emphasizing the bank's focus on economic development alongside profitability, as evidenced by its consistent annual profits.
Ahmed Mohamed Al Naqbi, CEO of Emirates Development Bank, expressed satisfaction with Fitch's rating affirmation, emphasizing EDB's financial strength in supporting the UAE's diversification agenda. Al Naqbi highlighted EDB's commitment to financing priority sectors aligned with the UAE government's visions, emphasizing sustainable economic development over profitability as a guiding principle.
In April 2021, EDB unveiled a comprehensive five-year strategy aimed at becoming a key financial catalyst for the UAE government's industrial and economic diversification agenda. This strategy focuses on supporting enterprises within five priority sectors crucial to the nation's development plans: manufacturing, advanced technology, healthcare, renewables, and food security. EDB allocated AED30 billion to support 13,500 companies within these sectors by 2026, reflecting its dedication to fostering sectoral growth and innovation.
Since the inception of its strategy, EDB's contributions to the nation's industrial GDP have surged to AED4.3 billion, with total financing reaching AED8.7 billion by the end of 2023. These figures underscore EDB's substantial impact on priority economic sectors, cementing its pivotal role in driving industrial diversification and sustainable growth in the UAE.
EDB's commitment to assessing economic impact extends beyond financial metrics. The bank has developed its proprietary Developmental Impact Scorecard, which evaluates projects and companies based on qualitative and quantitative economic indicators such as GDP growth, job creation, advanced technology adoption, and environmental sustainability. This holistic approach ensures that EDB's financing initiatives align with broader national development objectives while promoting innovation and sustainability across sectors.
In conclusion, Fitch's credit rating affirmation underscores EDB's instrumental role in advancing the UAE's economic agenda and promoting sustainable growth. As the bank continues to prioritize economic development and innovation, it remains poised to drive sectoral growth, foster entrepreneurship, and contribute to the nation's vision of a diversified and resilient economy. Through strategic initiatives and prudent financial management, EDB is well-positioned to navigate evolving economic challenges and propel the UAE towards a prosperous future.
By: Sahiba Suri
Comments