BofA Upgrades First Abu Dhabi Bank Rating, Price Objective Amid Strong Returns Potential

12:00 PM EDT, 08/26/2026 (MT Newswires) -- BofA Global Research upgraded its rating on First Abu Dhabi Bank (ADX:FAB) to buy from neutral, highlighting the lender's ability to deliver "attractive" growth at high returns. The research firm expects FAB to see a compound EPS growth rate of 7.6% over the 2025 to 2028 period and a 17% to 18% return on tangible equity, according to a Wednesday note. "FAB's strong loan growth pipeline and robust CASA ratio support our view that NIM (using management's definition) will remain close to the upper end of management's 1.8-1.9% guidance in 2026-28E. Balance sheet growth does the heavy lifting, with 11% gross loans CAGR and 7.6% for deposits in 2025-28E, increasing the loan/deposit ratio from 73% to 81%. That drives a 10% NII CAGR over 2025-28E, with our NII forecasts running 0.3-3.4% above consensus through 2028E. We see FAB's NIM resilient vs peers due to its scale, liquidity and client depth that smaller peers cannot easily replicate," analysts wrote, lifting the price objective by 10% to 23.20 Emirati dirhams. Analysts also adjusted their financial estimates for the lender, including lower EPS, revenue and net attributable profit forecasts for 2026 through 2028, mainly due to an expected decline in 2026 net interest income and a projected decrease in 2027 and 2028 non-funded income. "Despite FAB's revenue-diversification strategy, capital remains the most important enabler of its growth. Generating attractive returns on capital for lending, focusing on larger NFI franchises, growing CASA deposits and optimizing RWA are key levers for management to enhance profitability (capital generation) and capital efficiency," BofA added.