[RAM] FAB and GIC ratings remain stable amid escalating Middle East conflict

The escalation of the Middle East conflict has heightened geopolitical risk and uncertainty across the Gulf region, with strikes on critical infrastructure – among other developments – disrupting energy markets, trade flows and supply chains. The immediate financial impact on RAM-rated entities, First Abu Dhabi Bank P.J.S.C. (FAB) and Gulf Investment Corporation G.S.C (GIC) both last rated AAA/Stable/P1 in December 2025 has been contained so far. But a prolonged regional conflict would weigh on both the financial markets and real economy, that could pressure their ratings.  As at March 2026, FAB and GIC had RM500 mil and RM155 mil of sukuk due on 19 Dec 2027 and 18 June 2027, respectively.

Against this backdrop, we expect both entities to remain resilient in the near term, supported by healthy capital and liquidity positions and generally conservative risk profiles. As at end-December 2025, FAB reported a common equity tier-1 capital ratio of 13.3%, while GIC maintained a tier-1 capital ratio of 32% as at end-June 2025. Both entities exhibit a relatively higher reliance on wholesale funding than many regional peers, which is partly mitigated by sizeable liquidity buffers and long-standing relationships with large depositors.

FAB’s ratings incorporate a ‘high’ likelihood of extraordinary support from the government of Abu Dhabi and the UAE federal government, given its status as a domestic systemically important bank. We expect sovereign liquidity support to be forthcoming – particularly from the UAE central bank - if needed. While the conflict could weigh on medium-term growth, the country’s exceptionally strong fiscal and external positions provide a substantial buffer. The Emirate of Abu Dhabi, FAB’s ultimate majority shareholder, has a net asset position exceeding 300% of GDP and very low debt.

GIC’s ratings, meanwhile, reflect a ‘very high’ likelihood of shareholder support from its six Gulf Co-operation Council owners, which have demonstrated backing in past stress periods. In particular, the UAE, Qatar and Kuwait have strong capacity to provide timely support, underpinned by some of the region’s strongest fiscal and external buffers, including high net asset positions and low-to-moderate debt levels. The Kingdom of Saudi Arabia, while in a comparatively more moderate position due to sizeable domestic investment commitments, also have sufficient capacity and is expected to provide support if needed.

The duration and spillover effects of the conflict remain uncertain. Ratings stability will depend on the conflict’s scale and persistence and its impact on regional growth, liquidity and sovereign credit standing. RAM will continue to monitor developments, focusing on funding and liquidity positions and asset quality, and will provide updates as warranted.


Analytical contacts
Sophia Lee 
(603) 2708 8211   
sophia@ram.com.my

Jeremy Noel Paul
(603) 2708 8230
jeremynp@ram.com.my

Lee Yee Von
(603) 2708 8217
yeevon@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my