Emirates Development Bank’s ‘AA-‘ Credit Rating with Stable Outlook, Fitch Affirms
Fitch Ratings has reaffirmed Emirates Development Bank’s (EDB) ‘AA-‘ credit rating, signaling the bank’s robust creditworthiness and strategic significance to the UAE’s national agenda. The ‘stable’ outlook accompanying the rating further reflects confidence in EDB’s ability to sustain its financial strength over the long term.
In its assessment, Fitch Ratings emphasized EDB’s well-defined policy and developmental role within the UAE, foreseeing favorable operating conditions for the bank in 2024. Notably, EDB’s prioritization of economic development over profitability has been acknowledged, alongside its consistent track record of annual profitability.
Ahmed Mohamed Al Naqbi, CEO of Emirates Development Bank, expressed his satisfaction with Fitch’s rating affirmation, citing it as a testament to EDB’s robust financial position in supporting the UAE’s national diversification agenda. He highlighted the bank’s commitment to financing transactions within priority sectors, aligning with the government’s vision and priorities for sustainable economic development.
In April 2021, EDB embarked on a bold five-year strategy aimed at becoming a key financial engine driving the UAE government’s industrial and economic diversification goals. This strategy centers on providing support to large corporations, SMEs, and startups operating within five priority sectors crucial to the UAE’s national development plans: manufacturing, advanced technology, healthcare, renewables, and food security. The bank has earmarked AED30 billion to support 13,500 companies within these sectors by 2026.
Since the launch of its strategy, EDB has made significant contributions to the nation’s industrial GDP, with total financing reaching AED8.7 billion by the end of 2023. This underscores the bank’s substantial impact on priority economic sectors and its pivotal role in advancing the UAE’s vision for industrial diversification and sustainable growth.
To assess a company or project’s eligibility for finance, EDB has developed its own Proprietary Developmental Impact Scorecard. This scorecard evaluates both qualitative and quantitative economic impacts, including GDP growth, job creation, in-country value, advanced technology adoption, and greenfield or brownfield development, alongside traditional lending criteria.
In conclusion, Fitch’s reaffirmation of Emirates Development Bank’s ‘AA-‘ credit rating underscores the bank’s strategic vision, financial stability, and significant contributions to the UAE’s economic development agenda. By prioritizing sustainable growth and aligning its activities with national priorities, EDB continues to play a vital role in driving economic diversification and fostering prosperity in the UAE.
The bank’s commitment to supporting priority sectors, including manufacturing, advanced technology, healthcare, renewables, and food security, reflects a forward-thinking approach to economic development. By targeting industries with high growth potential and strategic importance, EDB maximizes its impact on the nation’s industrial landscape and positions itself as a catalyst for innovation and progress.
Moreover, EDB’s track record of success since the launch of its five-year strategy underscores the effectiveness of its approach. With total financing reaching AED8.7 billion by the end of 2023 and substantial contributions to the nation’s industrial GDP, the bank has proven its ability to deliver tangible results and drive meaningful change.
Looking ahead, EDB remains committed to its mission of driving economic diversification and sustainable growth in the UAE. By leveraging its strong financial position, strategic vision, and innovative approach to development finance, the bank is well-positioned to continue making significant contributions to the nation’s prosperity and resilience.
Fitch’s affirmation of Emirates Development Bank’s ‘AA-‘ credit rating and stable outlook is a testament to the bank’s strategic importance, financial strength, and positive impact on the UAE’s economic development agenda. With a clear focus on supporting priority sectors and fostering sustainable growth, EDB continues to play a crucial role in shaping the future of the UAE’s economy and advancing its long-term prosperity.
EDB’s emphasis on fostering economic growth extends beyond traditional lending criteria. By incorporating qualitative factors such as job creation, in-country value, and technology adoption into its assessment process, the bank demonstrates a holistic approach to driving sustainable development.
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