Bahrain foreign and local currency sovereign credit rating at ‘B+/B’: S&P 

Bahrain’s affirmed rating reflects continued reform but highlights greater fiscal and external vulnerabilities. Shutterstock
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Updated 24 April 2025
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Bahrain foreign and local currency sovereign credit rating at ‘B+/B’: S&P 

RIYADH: Continued fiscal reform efforts, stable economic diversification, and financial support from Gulf Cooperation Council partners have led S&P Global Ratings to affirm Bahrain’s long- and short-term foreign and local currency sovereign credit ratings at “B+/B.”

The American agency also maintained the nation’s transfer and convertibility assessment at “BB-.”

The ratings affirmation reflects Bahrain’s progress in strengthening non-oil revenue, commitment to structural reforms under the Fiscal Balance Program, and ongoing investment in sectors such as manufacturing and tourism. 

S&P also pointed to the country’s improved national accounts framework and stable regional alliances as key factors underpinning its sovereign credit profile, as well as emphasizing the importance of Bahrain’s strategic regional alliances in supporting its creditworthiness. 

“Our rating on Bahrain reflects supportive relations with GCC sovereigns,” said the report.

These relationships have resulted in significant financial assistance, including a $10.2 billion support package pledged by Saudi Arabia, the UAE, and Kuwait in 2018. 

The report noted that in 2024, Saudi Arabia’s Public Investment Fund formalized a $5 billion specialized investment vehicle specifically for Bahrain to “develop tourism, transportation, infrastructure, and the environment.” 

The country’s strategy has included non-oil revenue reforms under the government’s Fiscal Balance Program 2018–2024, S&P stated. 

These measures include the introduction of a value-added tax in 2019 — doubled to 10 percent in 2022 — a 15 percent domestic minimum top-up tax for multinational enterprises, planned corporate income tax for local companies, and an expanded scope for excise taxes. 

Recent revisions to Bahrain’s national accounting methodology have improved fiscal metrics by increasing nominal gross domestic product figures, thereby improving ratios such as debt-to-GDP, S&P explained. 

Across the Gulf region, sovereign credit ratings have generally reflected strong fiscal fundamentals and progress on economic reform. 

In March, S&P upgraded Saudi Arabia’s long-term rating to “A+” from “A,” citing sustained reforms under Vision 2030. Kuwait’s ratings were affirmed at “A+/A-1” in June, supported by robust fiscal and external positions. 

Oman received an upgrade to “BBB-” in September, reflecting fiscal consolidation and a reduction in public debt. 

Qatar’s “AA/A-1+” rating was affirmed in November, underpinned by its substantial hydrocarbon reserves. 

Against this backdrop, Bahrain’s affirmed rating reflects continued reform but highlights greater fiscal and external vulnerabilities. 

Despite these supportive elements, the agency revised Bahrain’s outlook to negative from stable. 

“The negative outlook reflects increasing risks to the fiscal position and the government’s ability to service and refinance debt.”

The agency stated that fiscal reform measures “may prove insufficient to put debt to GDP on a downward path,” while noting that “Bahrain’s foreign currency reserve position remains weak.” 

S&P projects the fiscal deficit will widen to “about 7.0 percent of GDP in 2025, compared with 5.2 percent in 2024 and 4.9 percent in our previous review.” 

The agency attributes this to “lower oil prices and ongoing field maintenance at the key Abu Sa’fah oil field, risks to funding costs amid market volatility, and higher social spending.” 

It added that “we recently revised our Brent oil price assumptions down to $65 per barrel in 2025, and $70/bbl over the medium term, relative to about $80/bbl in 2024.” 

Looking ahead, S&P anticipates the deficit will tighten, stating: “We anticipate the fiscal deficit will narrow toward 4.4 percent by 2028.” 

This is expected to result from “a recovery in oil production as maintenance on the Abu Sa’fah oil field, shared with Saudi Arabia, is completed and non-oil revenue continues to grow.” 

However, Bahrain’s rising debt burden remains a concern, according to the report, which said: “High debt levels continue to constrain the government’s fiscal flexibility.” 

Gross general government debt is projected to rise from 130 percent of GDP in 2024 to 144 percent by 2028, factoring in 3 percent of GDP in off-balance-sheet spending. 

“Over the last three years, debt to GDP has risen by about 18 percentage points after including overdraft facilities from the Central Bank of Bahrain, totaling 24 percent of GDP in 2024,” said S&P, adding that debt-servicing costs have also increased to approximately 29 percent of government revenue, one of the highest levels among sovereigns rated by the agency. 

Low foreign currency reserves also weigh on Bahrain’s external profile. “The government’s foreign currency reserve account has historically been restored via external issuance and fiscal support from other GCC sovereigns,” said the report. 

Usable reserves are estimated at “about negative $15 billion–$16 billion, after deducting the monetary base and foreign currency swaps with domestic banks, which we regard as encumbered.” 

Upcoming external government debt maturities heighten refinancing risks, said S&P, adding that over the next 12 months these will total $3.6 billion, including sukuk and bond payments due between August and May 2026. 

“We anticipate Bahrain will seek to refinance these maturities to avoid a significant drop in foreign currency reserves,” said the report. 

S&P noted that it “could lower the rating over the next six to 12 months if the government is unable to significantly reduce the pace of government debt accumulation, which has been higher than anticipated in recent years.” 

The rating could also come under pressure if there were a deterioration in foreign currency reserves due to weaker market access for funding or if the agency believed additional funding support for the GCC would not be forthcoming. 

Conversely, the outlook could be stabilized with meaningful progress on fiscal reforms. 

“We would revise the outlook to stable if the government were to implement fiscal reforms to materially increase the revenue base and narrow fiscal deficits, and if we saw improving foreign currency reserves,” said S&P. 


UAE shares end higher as outcome of US-China trade talks awaited

Updated 09 June 2025
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UAE shares end higher as outcome of US-China trade talks awaited

LONDON: Stock markets in the UAE ended higher on Monday, in step with Asian peers, as investors awaited the outcome of US-China trade talks in London in the hope that a deal could boost the global economic outlook.

Top US and Chinese officials will sit down in London on Monday for talks aimed at defusing the high-stakes trade dispute between the two super powers that has widened to export controls over goods and components critical to global supply chains.

Dubai’s benchmark index hit its highest levels since 2008 and settled up 1 percent, with almost all sectors in positive territory.

Tolls operator Salik Company gained 2.3 percent and Deyaar Development surged 14.6 percent.

In Abu Dhabi, the index was up for a third straight session and gained 0.1 percent, lifted by a 1.6 percent rise in blue-chip developer Aldar Properties and a 1.8 percent advance in Abu Dhabi’s flagship energy firm Abu Dhabi National Energy Company.

Most stock markets in the Gulf and Egypt including Saudi, Qatar, Kuwait are closed on Monday due to a public holiday.


Saudi commercial bank profits jump 16% in April, topping $2bn before zakat, tax

Updated 09 June 2025
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Saudi commercial bank profits jump 16% in April, topping $2bn before zakat, tax

  • Year-to-date earnings reached SR32.97 billion, an annual rise of 20%
  • Banks getting balance sheets ready for next investment wave

RIYADH: Saudi Arabia’s banking sector extended its winning streak in April, posting SR7.77 billion ($2.07 billion) in pre-zakat and tax profits, a 16 percent increase compared to the same month last year.

According to the Saudi Central Bank, also known as SAMA, this brought year-to-date earnings to SR32.97 billion, an annual rise of 20 percent, keeping the Kingdom firmly on course for another record-breaking period.

The sustained momentum is attributed to a robust mix of state spending on giga-projects, resilient consumer demand, and still-elevated interest rates.

Financing volumes continue to climb, driven primarily by corporate borrowers across a growing range of industries, including manufacturing, utilities, insurance, and private education. 

Speaking at the inaugural 24 Fintech conference in September, Finance Minister Mohammed Al-Jadaan said the Kingdom had licensed 224 fintech firms by the second quarter of 2024. File/SPA

Contractors are also racing to secure long-term credit for giga-projects such as NEOM, Diriyah, and the Jafurah gas field.

A wider Gulf picture

Strong as those local figures are, the broader region is also gaining momentum. A Kamco Invest report released in May showed that Gulf banks collectively earned a record $15.6 billion in the first quarter of 2025, an 8.6 percent increase from a year earlier.

Financial institutions in the UAE posted the largest absolute increase, adding $639.6 million, while Saudi lenders recorded the fastest annual growth at 17.2 percent.

Kamco added that fee income is rising, costs are under control, and loan-loss provisions fell sharply during the period, cushioning a small dip in net interest income.

Investor appetite is visible in market valuations. Forbes Middle East’s “30 Most Valuable Banks 2025” March list includes 10 Saudi lenders with a combined market cap of about $269 billion— roughly one-third of the entire ranking.

Al Rajhi Bank led the pack at $105.6 billion, with Saudi National Bank following at $54.7 billion.

Contractors are racing to secure long-term credit for giga-projects such as NEOM, Diriyah, and the Jafurah gas field. NEOM

Global Finance named Saudi Awwal Bank the Kingdom’s best lender in its May “World’s Best Banks in the Middle East 2025” release, highlighting its HSBC-backed mobile app upgrades, Visa Direct payments, and one-stop small and medium-sized enterprises lending platform.

Cleaning the books and raising cash

Banks are also getting balance sheets ready for the next investment wave.

Bloomberg reported in March that lenders are exploring sales of older non-performing loans to specialist investors to free up capital for upcoming mega project drawdowns.

They’re also tapping capital markets. By June, they had issued over $5.6 billion in Additional Tier-1 bonds, already a full-year record and the world’s second-largest AT1 issuance in 2025, according to Bloomberg.

The spree includes Al Rajhi Bank’s $1.25 billion deal in April, Banque Saudi Fransi’s $650 million perpetual at 6.375 percent in May, Saudi Awwal Bank’s $650 million inaugural issue, and Alinma Bank’s $500 million of sustainable sukuk, all heavily oversubscribed.

Saudi National Bank was ranked in the Forbes Middle East’s “30 Most Valuable Banks 2025” March list. Shutterstock

By tapping eager investors now, while margins remain healthy and global demand for Gulf paper is strong, lenders are bulking up capital buffers and keeping loan-to-deposit ratios in check. That leaves them better prepared to fund the fast-rising credit needs of projects like NEOM and Diriyah without tripping liquidity alarms later in the year.

Fintech role

Fintech is reshaping Saudi banking from the ground up. The Saudi Central Bank’s Open Banking Framework — most recently updated in September to cover payment-initiation services — sets common technical rules that let lenders and start-ups plug their systems together safely and at speed.

Speaking at the inaugural 24 Fintech conference in September, Finance Minister Mohammed Al-Jadaan revealed that the Kingdom had licensed 224 fintech firms by the second quarter of 2024, up from fewer than 100 just three years earlier.

One of the newest players is Riyadh-based Stitch, which closed a $10 million seed round on May 28. The company offers a single set of application-programming interfaces that lets banks, fintechs and even non-financial brands bolt on real-time payments and open-banking functions far faster than older systems.

Early adopters already include Lulu Exchange and point-of-sale platform Foodics. The founders say the fresh cash will go toward doubling the engineering team and expanding the product suite.

Saudi Arabia’s sustained momentum is attributed to a robust mix of state spending on giga-projects, resilient consumer demand, and still-elevated interest rates. File/AFP

Looking ahead

Riyad Capital’s first-quarter preview, released in April, expects another double-digit profit rise this year, about SR19 billion for the listed banks it tracks, as loan growth stays strong and rate cuts arrive slowly.

S&P Global, in its Saudi Arabia Banking Sector Outlook 2025 report, says a 10 percent increase in lending should outweigh a 20- to 30-basis-point dip in margins, keeping sector returns on assets near 2.1 percent to 2.2 percent.

Funding is the main watchpoint. Moody’s shifted its system outlook to stable on Feb. 25, saying strong credit growth is tightening liquidity, but capital buffers remain solid.

For now, asset-quality risks remain low. S&P expects non-performing loans to edge up to just 1.7 percent by the end of 2025, while loan-loss provisions are projected to stay around 50 to 60 basis points. Banks’ total capital ratios, hovering near 19 percent, provide a solid buffer to absorb potential shocks from falling oil prices or rising private-sector leverage.

Saudi lenders are still the region’s earnings workhorse. Profits are rising, market values are high, and fresh money — from bond buyers to venture capitalists — is flowing in. If they can keep gathering deposits quickly enough to fund a fast-growing loan book, the Kingdom’s banks look set to stay ahead of their Gulf neighbors in both profit and ambition well into next year.


Saudi carrier flynas to expand operations across 4 hubs, official says 

Updated 09 June 2025
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Saudi carrier flynas to expand operations across 4 hubs, official says 

  • Hubs include Riyadh, Jeddah, Madinah, and Dammam as part of growth plan
  • Carrier expanded its summer schedule, launching four new international destinations

RIYADH: Saudi Arabia’s low-cost carrier flynas is set to expand operations across its four main hubs — Riyadh, Jeddah, Madinah, and Dammam — as part of an ambitious growth plan, according to a top official. 

In an interview with Al-Eqtisadiah, Waleed Ahmed, the company’s official spokesperson, said that flynas holds the largest aircraft order in the Kingdom and one of the biggest in the Middle East, with a total of 280 aircraft set to be received. 

This follows a major deal signed in July with Airbus to acquire 160 new aircraft, including 30 wide-body A330neo and 130 single-aisle jets across A320neo, A321neo, and A321LR models. 

The airline has seen a sharp rise in passenger traffic, with volumes climbing from around 11 million in 2023 to more than 14.7 million in 2024, reflecting the low-cost carrier’s rapid expansion in line with Saudi Arabia’s push to position itself as a leading global hub for tourism and business. 

“These numbers reinforce the company’s role in supporting Vision 2030, which aims to increase the number of passengers to 330 million and attract more than 150 million international passengers by that year.” Ahmed said, as quoted by Al-Eqtisadiah. 

He also highlighted that, as part of its ambitious strategic plan, flynas has expanded its summer schedule by launching four new destinations for the first time: Krakow in Poland, Geneva in Switzerland, Milan in Italy, and Rize in Turkiye, in addition to its usual summer routes. 

Last week, flynas finalized its initial public offering at SR80 ($21) per share — the top of its indicated price range — following strong demand from both institutional and retail investors. 

The pricing values the airline at an estimated market capitalization of SR13.6 billion at listing. 

The offering followed the company’s announcement last month of its intention to float 30 percent of its share capital on the Saudi Exchange, making flynas the first airline in the Kingdom to go public and the first Gulf airline IPO in nearly two decades. 

In line with its ongoing fleet expansion, flynas recently took delivery of its fourth Airbus A320neo of 2025, bringing the total number of A320neo aircraft in its all-Airbus fleet to 57. The current fleet includes 63 aircraft — 57 A320neo, four A320ceo, and two A330neo wide-body jets.


Al-Habtoor Group chairman to lead high-level delegation to Syria, exploring investment opportunities

Updated 09 June 2025
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Al-Habtoor Group chairman to lead high-level delegation to Syria, exploring investment opportunities

  • Group said visit reflects its ongoing strategy to explore new cooperation with Syrian government
  • Khalaf Al-Habtoor to visit Syria in coming days

RIYADH: The head of Dubai conglomerate Al-Habtoor Group is set to visit Syria with a delegation of senior executives to discuss potential investments and partnerships with the new government.

According to a statement, the visit reflects the group’s ongoing strategy to explore new avenues of cooperation with the Syrian government and to assess potential investment opportunities across multiple sectors. 

It added that the trip stems from “a firm belief” in Syria’s ability to recover its strength and regional standing and the importance of public-private partnerships in the country’s rebuilding phase.

The move comes as Syria’s transitional government, led by President Ahmed Al-Sharaa, pushes economic reforms to attract foreign investment, including privatizations, relaxed trade policies, and major infrastructure deals. 

Speaking ahead of the trip, the group’s Chairman Khalaf Ahmad Al-Habtoor said: “Syria is a country rich in culture, history, and capable people. We believe in its future potential and are eager to play a role in its revival through meaningful projects that generate employment.”  

He added: “We look to Syria with great confidence. Its people possess the energy and resilience needed to shape a strong and prosperous future. As an Arab group with deep regional roots, we consider it both a moral and economic responsibility to stand as a partner in rebuilding stable and thriving societies.”

Al-Habtoor Group, a UAE-based multinational with a strong presence in the hospitality, real estate, and automotive industries, has a history of large-scale investments in the Middle East. The move follows the organization’s recent withdrawal from Lebanon, where it cited instability as a barrier to business.


Jordan’s foreign exchange reserves hold steady at $22.76bn in May

Updated 09 June 2025
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Jordan’s foreign exchange reserves hold steady at $22.76bn in May

  • Gold holdings at the end of May were valued at $7.76 billion
  • Qatar Central Bank recorded a 3.6% increase in its foreign currency reserves and liquidity

RIYADH: Jordan’s foreign exchange reserves remained largely unchanged in May, standing at $22.76 billion, as per new data released by the Central Bank of Jordan. 

The slight month-on-month dip — about 0.2 percent from April — reflects broad stability in the Kingdom’s external buffers. 

Jordan’s foreign exchange figures are broadly in line with trends observed across other Middle East and North African countries. 

The Qatar Central Bank recorded a 3.6 percent increase in its foreign currency reserves and liquidity, reaching 258.135 billion Qatari riyals ($70.9 billion) in May, up from 249.165 billion riyals in May 2024. 

Jordan’s long-term foreign-currency issuer default rating was affirmed at “BB-” with a stable outlook by Fitch Ratings. File/AFP

Egypt’s foreign exchange reserves rose to $48.525 billion by the end of May, compared to $48.144 billion in April, marking an increase of $381 million. 

“The Central Bank of Jordan stated in a statement today that its total foreign reserves are sufficient to cover the country’s imports of goods and services for approximately nine months,” the Qatar News Agency reported. 

The central bank also reported that gold holdings at the end of May were valued at $7.76 billion, totaling 2.345 million ounces, underscoring the role of bullion in Jordan’s reserve composition. 

“It added that the presence of comfortable levels of foreign reserves enhances the ability to influence exchange rates, provides a stable economic environment, and enhances the confidence of foreign creditors and investors,” the QNA report stated, citing the Jordan Central Bank. 

The Central Bank of Jordan said its total foreign reserves are sufficient to cover the country’s imports of goods and services for approximately nine months. File/AFP

In May, Jordan’s long-term foreign-currency issuer default rating was affirmed at “BB-” with a stable outlook by Fitch Ratings, citing the country’s macroeconomic stability and progress on fiscal and economic reforms. 

The US-based credit rating agency noted that the rating and stable outlook also reflect Jordan’s resilient financing sources — including a liquid banking sector, a robust public pension fund, and sustained international support. 

Despite the stable outlook, Jordan’s credit rating remains below that of several other countries in the region. In February, Fitch affirmed Saudi Arabia’s IDR at “A+” with a stable outlook, while the UAE was rated “AA-.” 

Fitch said the ratings are constrained by high government debt, moderate growth, risks from domestic and regional politics, as well as current account deficits and net external debt levels that exceed those of rating peers. 

Jordan’s foreign exchange figures are broadly in line with trends observed across other Middle East and North African countries. Central Bank of Jordan

A “BB” rating indicates elevated vulnerability to default risk, particularly in the event of adverse shifts in business or economic conditions. However, it also suggests some degree of financial or operational flexibility in meeting commitments. 

Fitch also noted that Jordan’s government remains committed to advancing its three-pillar reform agenda — spanning economic, public administration, and political sectors — despite external pressures. 

The agency added that the pace of reforms will continue to be shaped by the need to preserve social stability, resistance from vested interests, and institutional capacity limitations.