A. SREENIVASA REDDY (ABU DHABI)
Islamic syndicated financing remains a key funding source in the UAE, Fitch Ratings said in a report.
“The UAE is poised to maintain its leadership in the Islamic syndicated financing market,” Bashar Al Natoor, Managing Director and Global Head of Islamic Finance at Fitch Ratings, told Aletihad.
Islamic syndicated financing issued in the UAE in 2025 totalled around $30 billion, up by about 140% year-on-year and outpacing conventional issuances, which grew by roughly 36%, Al Natoor said.
“The UAE accounted for around 40% of Islamic syndicated financing issued globally in 2025,” he added.
Total outstanding Islamic syndicated financing in the UAE reached $70 billion, according to Fitch Ratings. The agency expects vibrant activity to continue next year.
“Vibrant activity is expected in 2026, driven by ease of requirements, faster execution, and the lower complexity of syndications compared to sukuk and bonds issuance,” Al Natoor said.
He added that the UAE’s Islamic finance and halal strategy, anticipated US Federal Reserve rate cuts (2026 forecast: 3.25%; 2027 forecast: 3%), lower oil prices (2026 and 2027 forecast: $63 per barrel), broad sector financing needs, and funding diversification goals could catalyse further growth.
“However, government measures to further develop sukuk and debt capital markets, alongside the rise of alternative funding channels, could also impact growth,” he said.
Explaining the structure, Al Natoor said syndicated Islamic financing is a Shariah-compliant funding tool typically provided collectively by a group of banks to a single borrower.
“Unlike a typical Islamic loan, which is usually provided by a single institution, syndicated Islamic financings harness multiple lenders to share risk and increase financing capacity,” he said.
Compared with bonds and sukuk, syndicated financing is generally not listed on capital markets and is not a tradable instrument, making it different in terms of marketability and liquidity, he added.
Globally, reported Islamic syndicated financing outstanding grew by around 16% in 2025 to about $215 billion, according to Bloomberg data cited by Fitch.
Outstanding syndicated financing in the core Islamic finance markets — the GCC countries, Egypt, Malaysia, Indonesia, Turkiye and Pakistan — increased by 6.6% to over $740 billion, with the Islamic financing share rising to 27.6% in 2025 from 25.9% in 2024 .
Reported global Islamic syndication issuance exceeded $76 billion in 2025, up 9% from 2024. Islamic syndications issued in core markets grew by about 2.4% year-on-year to $69 billion, below conventional syndication growth of 29.5%.
Saudi Arabia, the UAE, and Egypt together accounted for most global Islamic syndication outstanding at end-2025, with the UAE representing 33% of the total.
The US dollar accounted for about 60% of global Islamic syndicated financing outstanding at end-2025, compared with 55% a year earlier, mainly to tap into global and GCC liquidity. Tenors of Islamic syndications range from one year to 40 years.