Debt issuance by banks in the Gulf Cooperation Council (GCC) is set to remain high through 2026, following a strong run so far in 2025, according to a Fitch Ratings report. The rating agency said GCC banks have issued more than $60 billion in US-dollar debt this year, including certificates of deposit (CDs); excluding CDs, issuances are expected to reach about $40 billion.
Fitch attributed the surge in issuance to a combination of large upcoming debt maturities, rising credit demand in key markets, favourable global financing conditions, and tight domestic liquidity in Saudi Arabia. The agency said $36 billion of debt will fall due in 2026, which will further fuel issuance.
So far, Saudi banks lead the capital-raising, with $28.3 billion of new issues. UAE banks follow with $11 billion, Qatar with $8 billion, and Kuwait with $7 billion. Sukuk account for almost half of the new issuance when excluding CDs.
Subordinated debt (Tier 2 and similar instruments) has seen sharp growth. GCC banks have sold about $14.5 billion in subordinated debt this year, up from $7 billion in the same period in 2024. Saudi institutions contributed the bulk, issuing around $11.2 billion.
Saudi banks have also accessed the US-dollar Tier 2 market this year for the first time since 2020. They account for most of approximately $6 billion issued in this category in 2025, compared with roughly $1.5 billion in 2024. Fitch says the move is part of strategy to reduce reliance on Additional Tier 1 capital, due to minimal spread differences between AT1 and Tier 2 debt in GCC markets.
UAE and Qatari banks focused more on senior unsecured debt, including ESG-linked bonds and sukuk, to meet refinancing needs and to diversify funding sources. These banks have also issued floating-rate notes via Formosa markets: UAE banks raised about $3.5 billion, Qatari banks nearly $1 billion.
Fitch expects issuance to remain strong in 2026, supported by US Federal Reserve rate cuts and continued credit growth in Saudi Arabia and the UAE. Tight liquidity in Saudi Arabia will continue to press banks towards markets for external borrowing.
