The banking sectors of the UAE and Saudi Arabia are forecasted to experience robust credit growth in 2025, driven by high crude oil prices and an accelerating non-oil economy, according to a Fitch Ratings report. The analysis projects a financing growth of approximately 12% for Saudi banks, nearly double the Gulf Cooperation Council (GCC) average, while UAE banks are poised to benefit from regional economic diversification and strong government-backed initiatives.
The report reflects the optimism seen in other regional developments, such as the Singapore Fund’s Dh5 Billion pledge to Dubai’s AMIS Development, signaling an influx of investments supporting non-oil sectors.
Economic Context: Vision 2030 and Beyond
Saudi Arabia’s Vision 2030 initiative continues to be a cornerstone for its economic transformation, supporting mega-projects like NEOM and Red Sea developments. Fitch Ratings predicts that the operating environment for Saudi banks will remain favorable, with corporate financing accounting for 65-70% of new loans. Non-oil GDP is expected to grow at a strong 4.5% annually from 2024 to 2025, reflecting the Kingdom’s success in diversifying its economy.
Similarly, the UAE’s financial sector is benefiting from ongoing investments in technology, infrastructure, and company formation in Dubai, positioning the country as a hub for global business.
Regional Banking Strength and Risks
Fitch’s analysis highlights solid profitability, liquidity, and capital buffers for banks across the Middle East. However, geopolitical tensions and potential oil price volatility could impact the creditworthiness of regional financial institutions.
In the UAE, strong fiscal policies and government-backed initiatives have been key drivers of growth. Experts note that Dubai’s strategic focus on attracting foreign businesses—enhanced by flexible company formation processes and tax incentives—continues to boost investor confidence and credit activity.
Practical Insights for Investors
Given the positive outlook, businesses and entrepreneurs should explore opportunities in the Middle East’s expanding economic landscape. For those looking to establish operations in Dubai, the process of company formation in Dubai has never been more streamlined. With expert assistance, entrepreneurs can leverage the UAE’s business-friendly ecosystem to capitalize on this growth trend.
If you’re considering establishing a business in Dubai or tapping into the Middle East’s growing financial markets, now is the time to act. Contact DXB-VIP experts to guide you through company formation in Dubai, ensuring a seamless entry into this dynamic region.
Author Bio:
Jane Doe is a senior financial journalist with 8 years of experience covering Middle East banking and economic developments.
