Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
Bank of America (BofA) upgraded First Abu Dhabi Bank (FAB) from “Neutral” to “Buy” in its latest equity research note and raised its price objective to Dh23.20.
The revised price objective represents potential upside of about 18.1% from FAB’s Thursday closing price of Dh19.64.
BofA also reiterated its “Buy” ratings on Abu Dhabi Islamic Bank (ADIB) and Emirates NBD and raised its price objectives for both banks.
For FAB, BofA forecast earnings per share (EPS) of Dh1.92 in 2026 and Dh2.17 in 2027, implying growth of 13% in 2027. It expects EPS to rise further to Dh2.30 in 2028.
The research firm said FAB’s projected compound annual EPS growth of about 8% over three years and its potential return on tangible equity (ROTE) of 17% to 18% were not reflected in the bank’s share price.
BofA said FAB’s net interest margin was expected to remain resilient between 2026 and 2028, supported by the bank’s scale, liquidity and client base. It forecast compound annual growth of 11% in gross loans and 7.6% in deposits between 2025 and 2028.
The loan-to-deposit ratio is expected to rise from 73% to 81% over the period, contributing to compound annual growth of 10% in net interest income.
For ADIB, BofA raised its price objective to Dh27.20 from Dh26 and reiterated its “Buy” rating. The new objective implies potential upside of about 14.9% from Thursday’s closing price of Dh23.68.
BofA forecast ADIB’s EPS rising from Dh1.84 in 2026 to Dh2.15 in 2027, an increase of about 16.8%, before reaching Dh2.38 in 2028.
The research firm described ADIB as one of the strongest growth stories among UAE banks, forecasting an 11% compound annual increase in EPS over three years and an average return on equity of about 25%.
It expects average financing growth of 15% over three years to offset pressure on the bank’s net profit margin, the Islamic-finance equivalent of net interest margin. Fee-income growth and greater cost efficiency are also expected to support earnings.
ADIB’s Dh1.75 billion rights issue, announced on August 25, will strengthen its funding for growth, BofA said.
For Emirates NBD, BofA raised its price objective to Dh38.50 from Dh37.60 and reiterated its “Buy” rating. The objective represents potential upside of about 24.2% from the bank’s Thursday closing price of Dh31.
BofA forecast Emirates NBD’s EPS increasing from Dh3.71 in 2026 to Dh4.24 in 2027, representing growth of about 14.3%, and rising further to Dh4.81 in 2028.
The research firm said Emirates NBD’s growth prospects and return on equity remained underappreciated, with the bank trading at a price-to-book-value discount of about 29% to its UAE peers.
“Emirates NBD is one of our 10 Emerging stocks for 2026 and is on our Emerging EMEA 1 list of top ideas,” the BofA note said.
BofA expects Emirates NBD to record loan growth of 17% in 2026, excluding RBL Bank, supported by its UAE operations and increasing international diversification.
It forecast a 15% compound annual increase in group loans between 2026 and 2028, or 12% excluding RBL Bank. International operations are expected to account for about 37% of the loan book by 2028, up from 31% in the second quarter of 2026.
BofA expects Emirates NBD’s common equity Tier 1 (CET1) capital ratio to recover from 13.6% in the second quarter of 2026 to about 15% in 2028 through retained earnings and in the absence of further major acquisitions.
The bank’s CET1 fell to 13.6% in the second quarter of 2026 after RBL deal, leaving a modest buffer above its 11.4% minimum.
