RIYADH: According to a recent estimate by Fitch Ratings, Gulf Cooperation Council banks are expected to issue more than $30 billion in debt denominated in US dollars in 2025, after issuing a record $42 billion in 2024. Nearly $23 billion in expiring debt, declining US dollar interest rates, and robust regional credit demand—particularly in Saudi Arabia and the United Arab Emirates—are expected to fuel the spike in debt issuance.
This comes as 18 percent of all US dollar debt issued by emerging-market banks in 2024 came from GCC banks; if Chinese banks are taken out of the equation, the percentage rises to 36 percent. High oil prices, which are expected to stay above $70 per barrel in 2025, together with favourable global financing conditions, are expected to keep boosting investor confidence in the region.
Fitch Ratings said, “Given the country’s strong credit growth outlook, particularly in the corporate segment, and the banks’ increased use of external funding due to high competition for liquidity locally, we expect Saudi banks’ US dollar debt issuance to continue representing a high proportion of overall GCC issuance.”
The previous debt issuance record of $25.6 billion, set in 2020, was surpassed by GCC banks last year. High debt maturities, banks’ attempts to diversify their funding sources, and Saudi Arabia’s robust credit expansion were the main causes of this surge. According to the research, the region’s economic stability and investor optimism helped to generate $8.6 billion in certificates of deposit alone.
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