Fitch Ratings has affirmed Emirates Development Bank’s (“EDB” or “the Bank”) at ‘AA-‘credit rating, demonstrating the bank’s strong creditworthiness due to its strategic importance to the UAE’s national agenda. The rating also comes with a ‘stable’ outlook, indicating confidence in EDB’s long-term ability to maintain its financial stability.
In its report, Fitch Ratings highlighted that EDB has a “well-defined policy and development role in the UAE” and operating conditions that the ratings agency “expects to remain strong” in 2024. The Bank’s focus on economic development over profitability was also noted, as well as the fact that EDB has always posted a yearly profit.
Ahmed Mohamed Al Naqbi, CEO of Emirates Development Bank, said: “Fitch’s rating affirmation reflects EDB’s solid financial position to support the UAE’s national diversification agenda. This rating, coupled with a stable outlook, underlines our long-term ability to finance the right transactions within our priority sectors as we strive to drive economic development, in line with the UAE government’s visions and priorities. It is a strong affirmation of the viability of our approach in prioritizing sustainable economic development over profitability.”
In April 2021, EDB embarked on an ambitious five-year strategy to become the key financial engine of the UAE government’s industrial and economic diversification agenda. The strategy is focused on supporting large corporates, SMEs, and startups that operate within five priority sectors to the UAE’s national development plans – manufacturing, advanced technology, healthcare, renewables, and food security. The Bank allocated AED30 billion to support 13,500 companies within these sectors by 2026.
Since the launch of its strategy, EDB’s total contribution to the nation’s industrial GDP has grown remarkably to reach to AED4.3 billion, with AED8.7 billion in total financing by the end of 2023.
The annual results underscore EDB’s substantial impact on the nation’s priority economic sectors, reflecting its pivotal role in the UAE’s vision for industrial diversification and sustainable growth.
EDB has developed its own Proprietary Developmental Impact Scorecard which is a core component of how the Bank assesses a company or project’s eligibility for finance. Alongside normal lending criteria, EDB uses this scorecard to assess qualitative and quantitative economic impact such as GDP growth and job creation as well as in-country value, advanced technology adoption and greenfield or brownfield development.
Source: www.khaleejtimes.com