The banking sectors of the UAE and Saudi Arabia are projected to witness significant credit growth in 2025, fuelled by high crude oil prices and a rapidly expanding non-oil economy, according to a report by Fitch Ratings. The analysis predicts financing growth of approximately 12% for Saudi banks—almost double the Gulf Cooperation Council (GCC) average—while UAE banks are set to benefit from regional economic diversification efforts and robust government-backed initiatives.
The report mirrors optimism reflected in other regional developments, such as the Singapore Fund’s Dh5 billion pledge to Dubai’s AMIS Development, which signals a surge in investments bolstering non-oil sectors.
Economic Context: Vision 2030 and Beyond
Saudi Arabia’s Vision 2030 initiative remains pivotal in its economic transformation, supporting landmark mega-projects like NEOM and the Red Sea developments. Fitch Ratings forecasts a favourable operating environment for Saudi banks, with corporate financing accounting for 65–70% of new loans. Non-oil GDP is expected to grow at an impressive 4.5% annually from 2024 to 2025, showcasing the Kingdom’s strides in diversifying its economy.
Similarly, the UAE’s financial sector continues to thrive, with substantial investments in technology, infrastructure, and business setup services in Dubai positioning the nation as a hub for global commerce.
Regional Banking Strength and Risks
Fitch’s analysis underscores solid profitability, liquidity, and capital buffers for banks across the Middle East. However, geopolitical tensions and potential oil price volatility remain key risks that could affect the creditworthiness of financial institutions in the region.
In the UAE, sound fiscal policies and government-supported initiatives remain vital growth drivers. Experts highlight that Dubai’s strategic emphasis on attracting foreign enterprises—reinforced by streamlined company formation processes and tax incentives—continues to boost investor confidence and drive credit activity.
Practical Insights for Investors
With such a promising economic outlook, businesses and entrepreneurs are encouraged to explore opportunities within the Middle East’s burgeoning economic landscape. For those considering establishing operations in Dubai, the process has never been more straightforward. Entrepreneurs can take advantage of the UAE’s business-friendly ecosystem to capitalise on these growth trends.
If you’re looking to set up a business in Dubai or tap into the Middle East’s expanding financial markets, now is the time to act. Contact DXB-VIP experts for guidance on company formation in Dubai, ensuring a seamless entry into this dynamic region.
Author Bio:
Jane Doe is a senior financial journalist with eight years of experience covering Middle East banking and economic developments.
