Fitch Ratings forecasts neutral outlook for Middle East banks in ’25

Fitch Ratings is projecting a neutral sector outlook for Middle Eastern banks in 2025, citing stable economic conditions and financial metrics.

According to the agency’s latest Middle East Banks Outlook 2025 report released on Monday, credit growth is expected to rebound, supported by sustained high oil prices and steady non-oil sector expansion.

Approximately two-thirds of Fitch-assigned Issuer Default Ratings (IDRs) for Middle Eastern banks are investment-grade, with 63 per cent influenced by potential sovereign support.

The remaining ratings include 33 per cent based on standalone creditworthiness, as indicated by Viability Ratings (VRs), and 4 per cent tied to potential shareholder support.

The ratings span a broad range from ‘AA-’ to ‘CCC,’ reflecting the region’s varied sovereign rating landscape, with the lowest ratings predominantly associated with Iraqi banks.

Attribution: Fitch Ratings

Subediting: Y.Yasser