A. SREENIVASA REDDY (ABU DHABI)

UAE-listed banks outperformed their GCC peers across several key banking metrics in the second quarter of 2026, leading the region in loan growth, return on equity and cost efficiency, according to a Kamco Invest report covering 55 listed banks in the region.

Gross loans at UAE-listed banks grew 4.5% during the quarter to $816.5 billion, the strongest increase in the GCC for a second consecutive quarter. Omani banks followed with growth of 4.1%, while loans at Kuwaiti, Bahraini, Saudi and Qatari banks rose 2.3%, 1.9%, 1.6% and 1.4%, respectively.

The UAE’s loan growth was partly supported by Emirates NBD’s $2.8 billion acquisition of a majority stake in India’s RBL Bank in June. The transaction added Dh74 billion in assets and Dh44 billion in loans to the group.

Emirates NBD’s gross loans rose 17% during the first half of the year to Dh771 billion. First Abu Dhabi Bank’s net loans increased 16% year on year to Dh661 billion, prompting the lender to move its full-year loan-growth guidance to the upper end of its low-to-mid-teens range.

Central bank data also showed strong credit expansion, with gross credit in the UAE reaching Dh2.76 trillion at the end of June, an increase of 18.1% from a year earlier. Foreign credit grew 37.5% to Dh582.4 billion, accounting for about a fifth of the total loan book.

UAE banks were also the largest revenue-generating group in the GCC, reporting combined revenue of $13.4 billion during the quarter. Their net interest income reached $8.4 billion, second only to the $8.7 billion recorded by Saudi-listed banks.

FAB’s net interest income grew 15% year on year, supported by a larger loan book. Non-funded income accounted for 41% of the bank’s revenue, with fees and commissions rising 20%.

Net profit reported by UAE-listed banks increased 8.2% year on year to $6.8 billion, the highest aggregate profit among GCC banking markets. Saudi banks followed with $6.6 billion, representing annual growth of 8.4%.

Across the GCC, aggregate banking revenue reached a record $36.2 billion, rising 2.4% quarter on quarter. Net profit climbed to a record $17.7 billion, up 5.6% from the previous quarter and 7.2% from a year earlier.

UAE-listed banks also retained the region’s highest return on equity at 17.9%, compared with the GCC average of 15.5%. Saudi banks recorded a return of 15.7%, followed by Qatar at 14.5%, Oman at 11.5%, Kuwait at 11.1% and Bahrain at 10.2%.

In terms of operating efficiency, UAE banks had the GCC’s lowest cost-to-income ratio at 24.2%, followed by Qatar at 25.2% and Saudi Arabia at 28.4%. A lower ratio indicates that a bank incurs less operating expenditure for each unit of income it generates. The GCC-wide ratio stood at 28.2%.

Customer deposits at UAE-listed banks rose 2.6% during the quarter to $1.07 trillion, the second-strongest growth in the region after Oman’s 6.2%. The UAE banks’ net loan-to-deposit ratio increased to 74.1% from 72.7% but remained well below the GCC average of 85.9%.

Loan impairment charges booked by UAE-listed banks fell 31.4% quarter on quarter to $681.5 million, the second-largest decline in the GCC after Kuwait. The UAE banking sector’s cost of risk improved to 0.46% from 0.50%.

However, net interest margin remained under pressure. The report’s UAE data showed the margin declining to 2.47% in the second quarter from 2.49% in the preceding quarter, reflecting the continuing repricing of assets and funding.