GCC lenders account for 30% of USD issuances by EM banks this year.
Debt issuances by banks in the Gulf Cooperation Council (GCC) are set to remain strong through 2026 after exceeding $60 billion so far this year, Fitch Ratings said in a new report.
Excluding certificates of deposit (CDs), issuances will hit $40 billion in 2025, it added.
The surge was driven by heightened maturities, strong credit growth and favourable financing conditions.
“We expect continued strong issuance in 2026, supported by further US Fed rate cuts, $36 billion of debt maturities, additional strong credit growth in Saudi Arabia and the UAE, and persistent tight domestic liquidity conditions in Saudi Arabia,” Fitch stated.
Issuance this year has already reached $55 billion, beating the 2024 total of $36 billion and the 2025 maturities of $23 billion. Excluding CDs, issuances reached $36 billion, outpacing Fitch’s start-of-the-year estimates.
Saudi lenders lead issuance with $28.3 billion, followed by banks in the UAE ($11 billion), Qatar ($8 billion) and Kuwait ($7 billion). Sukuk accounts for nearly half of the new deals, excluding CDs.
GCC banks account for almost 30% of US dollar issuance by emerging-market (EM) banks this year, and more than 60% when excluding Chinese banks.
Subordinated debt sales by GCC banks this year have already reached $14.5 billion, compared to $7 billion in 2024, accounting for 40% of issuance, excluding CDs.
This is being fuelled by Saudi banks ($11.2 billion) issuing to support financing growth linked to Vision 2030 projects and in anticipation of tighter capital regulation.
Saudi banks have tapped the US dollar Tier 2 debt market for the first time since 2020. They account for most of the $6 billion of such debt already issued this year, compared to $1.5 billion last year.
The move is to diversify their non-common equity Tier 1 capital away from additional tier 1 (AT1), which remains dominant, given the modest spread differential between AT1 and Tier 2 debt in the GCC.
Meanwhile, the UAE and Qatari banks have focused on senior unsecured debt issuance to meet refinancing needs and diversify their funding bases, particularly through ESG bonds and sukuk.
They have also been active in the Taiwanese Formosa market through floating-rate notes, with UAE banks raising about $3.5 billion and Qatari banks nearly $1 billion.
“We expect UAE bank issuance to remain driven by refinancing and diversification as the sector has good liquidity and a solid net foreign asset position,” the report said.
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