Fitch Affirms Mumtalakat After Record 2025 Profit of 592.7 Million Dinars, Riyad Bank Keeps A1

By The Edge Research Team

Fitch Ratings affirmed Bahrain Mumtalakat Holding Company at ‘B’ with a Stable Outlook on 22 October. The sovereign wealth fund’s net profit attributable to its shareholder rose to a record 592.7 million Bahraini dinars in 2025, from 316.5 million dinars in 2024. The same day Moody’s Ratings affirmed Riyad Bank’s deposit ratings at A1 with a stable outlook and assigned a (P)A2 rating to The Arab Energy Fund’s new junior subordinated note programme.

Three Gulf rating actions, 22 October 2026

Mumtalakat’s sukuk programme was affirmed at B. Riyad Bank’s standalone assessment was affirmed at baa1 and Riyad Sukuk Limited’s senior ratings at A1 and (P)A1.

Mumtalakat: A Record Year and a Thicker Equity Cushion

Mumtalakat is Bahrain’s investment arm outside oil and gas, and the state owns all of it. Its rating is set level with Bahrain’s own B, Stable, because the agency judges extraordinary government support “virtually certain”, not because of the fund’s own results. Given the company’s very tight links with the government, no standalone credit profile is assessed. The state does not guarantee Mumtalakat’s debt, but the company has historically received shares in state-owned companies, funds and development land. The support score is 45 out of 60, or 75 percent of the maximum, on our calculation. Two international peers, Samruk-Kazyna and ADQ, also score at least 45, which the agency says leads to the equalisation of their ratings with their sovereigns’.

Profit grew 87.27 percent in 2025, on our calculation. The company credited two things: higher revenue, which reached 2.5 billion dinars on its own figures against 2.2 billion dinars, and larger fair value gains on investments linked to McLaren Racing. The agency likewise says the rise was driven in part by higher market values of investments. The agency’s commentary puts 2025 consolidated total revenue at 2.6 billion dinars instead. In April 2025 Mumtalakat completed the sale of McLaren Automotive and a non-controlling stake in McLaren Racing.

Alba carried the operating side. The smelter, Mumtalakat’s main subsidiary, earned 218.7 million dinars in 2025, up from 184.5 million. That is a gain of 18.54 percent, on our calculation. It produced a record 1.62 million tonnes, and higher average aluminium prices on the London Metal Exchange helped. Mumtalakat’s share of profit from National Bank of Bahrain, one of its principal associates, rose 4.90 percent to 36.4 million dinars, on our calculation.

The portfolio is also less tied to metals than a year ago. On the agency’s revenue figures, metals supplied 68 percent of consolidated revenue in 2025, against 72.5 percent in 2024. The other businesses therefore rose to 32 percent of revenue from 27.5 percent, on our calculation. They span banking, real estate, telecommunications and air transport.

Mumtalakat’s balance sheet against Bahrain’s estimated GDP

Profit from Mumtalakat’s 2025 results release of 24 May 2026. Equity, assets, the equity share and GDP from the agency’s commentaries of 23 October 2025 and 22 October 2026. The 2024 equity share is the agency’s approximation.

Equity rose 40.63 percent in a year, on our calculation, and the equity share of assets rose to 55 percent from an estimated 44 percent in 2024, by Fitch’s figures. Assets grew 13.89 percent, on our calculation. Bahrain’s GDP, on the agency’s estimates in its two reviews, rose 3.95 percent, on our calculation. Mumtalakat’s assets therefore equalled 44.57 percent of GDP at the end of 2025, up from 40.68 percent, on our calculation. Its equity alone equalled 24.46 percent of GDP, on our calculation. The 2025 profit came to 13.17 percent of year-end equity, on our calculation.

Debt stayed steady relative to the economy. The group’s consolidated debt, subsidiaries included, equalled 15 percent of GDP in each of the agency’s last two annual reviews. State control is direct: five government officials sit on the nine-member board, which approves all major operational and financing decisions. The company’s 500 million dollar sukuk falls due on 21 January 2027. It was issued in 2020 for seven years at a profit rate of 4.1 percent. The maturity is 91 days from the affirmation, on our calculation. The profit payments come to 20.5 million dollars a year, on our calculation.

Riyad Bank: A1 Rests on Capital and a Three-Notch Support Uplift

Riyad Bank’s A1 deposit rating from Moody’s combines a standalone baa1 assessment with three notches of uplift. The uplift reflects a very high probability of support from the Government of Saudi Arabia. Its national scale deposit rating was affirmed at Aa2.sa, and the stable outlook also reflects the stable outlook on the sovereign.

Capital is the anchor. The common equity Tier 1 ratio stood at 14.0 percent and the total capital ratio at 19.4 percent. The gap between the two ratios is 5.4 percentage points, on our calculation. Tangible common equity covered 13.8 percent of risk-weighted assets. Strong internal capital generation supports that capital, the agency said.

Riyad Bank’s capital, earnings and funding ratios

All ratios are the agency’s own measures, as published in its affirmation of 22 October 2026. Loan-loss reserves fully cover problem loans.

The agency expects profitability to remain resilient. The bank’s cost-to-income ratio of 30 percent means it spends 30 riyals for every 100 riyals of income, on our calculation. Credit costs remain low. Problem loans were 1.3 percent of gross loans in June, on the agency’s measure. Customer deposits grew 9.9 percent on the year to June, and the loans-to-deposits ratio moderated to 108 percent. The agency expects slower credit growth to ease funding pressure over the next 12 to 18 months. The Edge covered the bank’s third-quarter results on 21 October.

The softer points come from the loan book. Stage 2 loans rose to 5.0 percent of gross loans from 3.7 percent at the end of 2025. That is 1.3 percentage points higher, on our calculation. The net interest margin was 2.5 percent, against 2.6 percent in 2025. The agency expects asset quality to soften moderately from very strong levels as credit growth slows with non-oil growth, and it cites the bank’s exposure to small and medium-sized firms as a constraint.

The Arab Energy Fund: A Hybrid That Counts Fully as Equity

The Arab Energy Fund (TAEF), a multilateral lender to the energy sector, is rated Aa2. The agency placed the new junior subordinated programme three notches lower, at (P)A2, because the notes rank behind all senior creditors and ahead only of shareholders’ equity. They will be perpetual, with a first reset after 5.5 or 7 years at the fund’s choice, and carry no cross default with its senior bonds.

The loss-absorbing terms are explicit. The fund may skip coupons at its discretion, and skipped coupons do not accumulate. Coupons stop automatically if assets exceed 8 times shareholders’ equity, and the notes are written down to zero above 16 times. The agency gives them 100 percent equity content, which under its method for multilateral lenders typically goes with a three-notch gap.

The Arab Energy Fund’s balance sheet against the note triggers

Assets and equity from the fund’s first-half 2026 results release of 30 September 2026. The assets-to-equity multiple is our calculation; the triggers are from the 22 October rating action.

The fund sits well inside both triggers. Its assets were 3.68 times equity at the end of June, on our calculation. As a simplified illustration, with equity kept at its end-June level and nothing else changed, coupons would stop only once assets passed 30.4 billion dollars, on our calculation. That is 2.17 times the June balance sheet, on our calculation. Put the other way, on the same simplified basis, equity would have to fall to 1.75 billion dollars before the 8 times line is crossed at June assets, on our calculation. That is a drop of 53.95 percent, on our calculation.

The balance sheet is still growing. Assets rose 4.48 percent in the first half from 13.4 billion dollars at the end of 2025, on our calculation. The capital adequacy ratio was 27.91 percent. Operating profit rose more than 16 percent on the year, the fund said. It reached 144.2 million dollars. Net income for the half was 125.4 million dollars. Corporate banking assets reached 6.2 billion dollars. That is 44.29 percent of total assets, on our calculation. In 2025 the fund posted record net income of 282.4 million dollars.

The Aa2 rating rests on strong solvency, ample liquid resources, diversified funding and a large callable capital buffer from shareholders, the agency said. It counts portfolio concentration and exposure to the energy transition against it, and says those risks are increasingly mitigated by its financing of renewable energy and other sustainability-linked projects, funded from issuances under its Green Finance Framework.

Why it matters: Two issuers had their ratings affirmed, and the third gained a new provisional rating on a fresh programme. Each carries a sizeable capital base, on our reading. Mumtalakat’s equity now equals 55 percent of its assets. Riyad Bank’s total capital ratio is 19.4 percent. TAEF gains a way to raise capital that the agency counts fully as equity, on our reading.

Outlook: Mumtalakat’s rating sits at Bahrain’s own B, Stable, on support the agency judges virtually certain, and a positive action on the sovereign’s ratings is the agency’s listed route to an upgrade. Riyad Bank could move up with a Saudi upgrade, or by building stronger capital buffers and reducing riskier lending to smaller firms. A definitive rating may follow the final issuance of the notes, provided their structure and terms are unchanged. The next markers are the sukuk maturity on 21 January 2027 and the fund’s first issue under the new programme.

Sources: Fitch Ratings, Moody’s Ratings, Bahrain Mumtalakat Holding Company, The Arab Energy Fund, The Edge.

Get Complimentary Insights

Follow us