[RAM] RAM Ratings affirms First Abu Dhabi Bank's ratings

RAM Ratings has affirmed First Abu Dhabi Bank P.J.S.C.’s (FAB or the Group) AAA/Stable/P1 financial institution ratings, along with the respective AAA/Stable and AA₁/Stable ratings of the senior and subordinated notes under the Group’s RM3 billion Islamic/Conventional Medium-Term Note Programme (2010/2030).

The affirmation reflects the Group’s dominant market position in the United Arab Emirates (UAE) and its solid credit fundamentals. FAB remains a leader in investment banking and wholesale lending, facilitating transactions for the Government of Abu Dhabi (GoAD), related government entities and large corporates. Its asset quality indicators and profitability are still resilient, backed by favourable economic conditions. The Group’s diverse earnings base, strong earnings generation and sturdy capital position provide a sufficient buffer to absorb credit losses. Sector, borrower and depositor concentration risks moderate these strengths.

FAB’s status as a domestic systemically important bank and the GoAD’s close ties with and ownership of the Group make extraordinary support from the GoAD and UAE federal government highly likely if required. However, no uplift is factored into the ratings given FAB’s strong standalone credit profile.

Asset quality indicators continued to improve, with the gross impaired loan ratio easing to a record low of 2.6% as at end-September 2025 (industry: 3.2%). Stage 2 and restructured loans stayed minimal. Robust economic conditions, potential interest rate cuts and more stringent Central Bank of UAE regulations are expected to support the Group’s asset quality going forward.

As the GoAD’s preferred bank, FAB benefits from a steady stream of lending opportunities and deposit inflows from government and related entities. Current and savings account deposits accounted for 44% of total deposits – reflecting sustained traction in cash management – albeit largely non-retail in nature. While balance sheet concentration persists, liquidity remains ample, keeping liquidity coverage and net stable funding ratios above regulatory requirements at a respective 152% and 106% as at end-June 2025.

FAB’s pre-tax profit for 9M FY Dec 2025 rose 26% y-o-y to AED19.3 bil, translating into an annualised return on risk-weighted assets of 3.7% (FY Dec 2024: 3.2%). The improved performance was driven by strong revenue, resilient margins, lower net impairment expenses and cost control. Market-sensitive fee income introduces some volatility but strategic expansion into asset management and private banking/wealth management enhances earnings stability. Capitalisation remains sturdy, with a common equity tier-1 capital ratio of 13.7% as at end-September 2025, supported by strong profit accumulation and ongoing risk-weighted asset optimisation.


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Jeremy Noel Paul
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jeremynp@ram.com.my

Sophia Lee 
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