10 September 2026
UAE listed banks closed the second quarter of 2026 ahead of every other Gulf market on three measures at once: lending growth, profitability and cost efficiency. Gross loans rose 4.5% over the quarter to USD 816.5 billion, return on equity reached 17.9% against a GCC average of 15.5%, and the cost-to-income ratio came in at 24.2%, the lowest in the region. Net profit was USD 6.8 billion, up 8.2% year on year and the largest of any GCC banking market, while customer deposits grew 2.6% to USD 1.07 trillion. The figures come from a Kamco Invest report covering 55 listed banks across the Gulf, reported on 10 September 2026.
The scoreboard: UAE against its Gulf peers
Kamco Invest compiles the published quarterly accounts of every bank listed on a GCC exchange, which makes the comparison a like for like one across the six markets. On lending, the UAE led the region for a second consecutive quarter.
| Market | Gross loan growth, quarter on quarter | Gross loans |
|---|---|---|
| UAE | 4.5% | USD 816.5 billion |
| Oman | 4.1% | USD 88.2 billion |
| Kuwait | 2.3% | USD 290.6 billion |
| Bahrain | 1.9% | not disclosed in the report summary |
| Saudi Arabia | 1.6% | USD 876.1 billion |
| Qatar | 1.4% | not disclosed in the report summary |
| GCC total | 2.6% | USD 2.59 trillion, a record |
Saudi Arabia still carries the largest loan book in the Gulf at USD 876.1 billion, but it grew that book by 1.6% in the quarter while the UAE grew by 4.5%. On our own arithmetic on the report’s figures, the UAE accounted for roughly 31.5% of all GCC listed bank lending at the end of June and for a materially larger share of the quarterly increase. Across the region, gross lending by the 55 banks reached a record USD 2.59 trillion, up 2.6% over the quarter and 11.6% over twelve months, with Islamic banks growing financing 3.3% against 2.4% at conventional lenders.
On profitability and efficiency the gap is wider.
| Market | Return on equity | Cost-to-income ratio |
|---|---|---|
| UAE | 17.9% | 24.2% |
| Saudi Arabia | 15.7% | 28.4% |
| Qatar | 14.5% | 25.2% |
| Oman | 11.5% | not disclosed in the report summary |
| Kuwait | 11.1% | not disclosed in the report summary |
| Bahrain | 10.2% | not disclosed in the report summary |
| GCC average | 15.5% | 28.2% |
Where the loan growth came from
Two names explain most of the quarter. Emirates NBD bought a majority stake in India’s RBL Bank in June for USD 2.8 billion, a transaction that added AED 74 billion of assets and AED 44 billion of loans to the group in one step. Emirates NBD grew gross loans 17% over the first half to AED 771 billion. First Abu Dhabi Bank lifted net loans 16% year on year to AED 661 billion and moved its full year loan growth guidance to the upper end of its low to mid teens range.
That matters for how the 4.5% should be read. Our own arithmetic on the report’s figures puts the UAE loan book at about USD 781 billion at the end of March, so the quarterly increase was roughly USD 35 billion. The AED 44 billion that RBL Bank brought in is close to USD 12 billion, or about a third of that increase. Strip the acquisition out and organic growth lands near 3%, which would still be strong but would place the UAE second behind Oman rather than first. The headline number is real, and so is the fact that part of it was bought rather than lent.
The domestic credit picture
Central bank data points the same way for lending inside the country. Gross credit in the UAE reached AED 2.76 trillion at the end of June, an increase of 18.1% from a year earlier, and foreign credit grew 37.5% to AED 582.4 billion, close to a fifth of the total loan book. We covered that monthly series in our note on UAE bank lending in June 2026.
The two data sets are not directly comparable and should not be added together. Kamco Invest measures the consolidated accounts of listed banking groups, which include overseas subsidiaries such as RBL Bank in India or DenizBank in Turkey. The central bank measures credit extended by banks operating in the UAE. Both are rising quickly; they simply count different perimeters.
Revenue and profit: the largest pool in the Gulf
UAE banks were the biggest revenue generators in the region, reporting combined revenue of USD 13.4 billion for the quarter, close to AED 49 billion. Net interest income reached USD 8.4 billion, second only to the USD 8.7 billion booked by Saudi listed banks. At First Abu Dhabi Bank net interest income grew 15% year on year on the back of a bigger loan book, non funded income made up 41% of revenue and fees and commissions rose 20%.
Net profit at UAE listed banks came to USD 6.8 billion, up 8.2% year on year and the highest aggregate of any GCC banking market. Saudi banks followed at USD 6.6 billion with annual growth of 8.4%. For the Gulf as a whole, aggregate banking revenue hit a record USD 36.2 billion, up 2.4% over the quarter, and net profit hit a record USD 17.7 billion, up 5.6% over the quarter and 7.2% over the year. On our arithmetic that leaves UAE banks with about 37% of Gulf banking revenue and about 38% of Gulf banking profit, from roughly 31.5% of the lending.
The banking result also drove the wider corporate scoreboard: banks and real estate led the 28.6% jump in profits at UAE listed companies that we covered in our note on second quarter results across the UAE market. The trend is not new either, as the sector reported record full year profit for 2025.
Why a 24.2% cost-to-income ratio matters
Cost to income measures how much operating expenditure a bank incurs for each unit of income it generates. At 24.2% the UAE sector spends about a quarter of what it earns on running itself, against a Gulf average of 28.2%, with Qatar at 25.2% and Saudi Arabia at 28.4%. Four percentage points of difference on a revenue pool of USD 13.4 billion is worth well over USD 500 million a quarter in retained earnings, which is a large part of why the same banks post the highest return on equity in the region.
For a customer the ratio is not an abstraction. Banks that run lean have more room to absorb the cost of onboarding, compliance review and account maintenance, and that shows up in how quickly a corporate account application moves. It does not, however, remove the compliance work itself, which is the part most new companies underestimate.
The pressure point: margins are shrinking
The one line moving against the sector is the margin. The report’s UAE data shows net interest margin falling to 2.47% in the second quarter from 2.49% in the first, as assets and funding continue to reprice. Across the Gulf the margin stood at 2.78%. Kamco Invest put the mechanism plainly: with the bulk of repricing now behind them, banks are relying on volume rather than rate to grow the interest line.
That single sentence explains the whole quarter. Profit did not grow because money became more expensive to borrow; it grew because there is more of it lent out. A lender whose earnings depend on volume needs new borrowers, and that changes how it treats a credit application.
Risk and liquidity: room on the balance sheet
Two more numbers complete the picture. Loan impairment charges at UAE listed banks fell 31.4% over the quarter to USD 681.5 million, the second largest decline in the Gulf after Kuwait, and the sector cost of risk improved to 0.46% from 0.50%. Banks are provisioning less because fewer loans are going wrong, a pattern consistent with the sharp fall in deferred loan repayments reported earlier this year.
The net loan-to-deposit ratio rose to 74.1% from 72.7% but stayed far below the Gulf average of 85.9%. Deposits grew 2.6% over the quarter to USD 1.07 trillion, the second fastest growth in the region after Oman at 6.2%. On our own arithmetic, closing that gap to the regional average on the current deposit base would mean roughly USD 126 billion of additional lending capacity without a single new deposit. That is an illustration of headroom rather than a forecast, but it is the reason UAE banks can keep growing the loan book while margins compress.
What this means for business in the UAE
Nothing in this report changes a rule, a fee or a procedure. It is a quarterly scoreboard, not a regulation, and any company reading it should treat it that way. What it does describe is the posture of the banks that a business here deals with every day.
Three practical consequences follow. First, lenders that grow earnings through volume rather than rate have a reason to compete for good corporate borrowers, which is a better environment in which to ask for a facility than a margin driven one. Second, deposits are growing more slowly than loans, so competition for corporate balances is real and pricing on deposits and cash management is worth negotiating rather than accepting. Third, none of this touches onboarding standards: a bank with a 24.2% cost-to-income ratio holds that ratio precisely by not spending unnecessary time on incomplete files. A clean licence, a coherent activity list, documented source of funds and a plausible business rationale still decide how long an application takes.
What to watch in the next quarter
- Net interest margin: whether the drift from 2.49% to 2.47% continues or stabilises once repricing works through.
- Organic loan growth: the third quarter will be the first clean read without the RBL Bank consolidation distorting the comparison.
- The loan-to-deposit ratio: a move from 74.1% toward the Gulf average would confirm that banks are deploying the headroom.
- Cost of risk: whether 0.46% is a floor or continues to improve.
- Deposit competition: pricing on corporate current and call accounts as loans outgrow deposits.
- Foreign credit: the AED 582.4 billion book grew 37.5% in a year and is now close to a fifth of total lending.
How Atlant Capital can help
A strong banking sector is only useful to a company that can actually get through the door. We set up mainland and free zone companies with activity lists that banks read without questions, through our company formation service. We prepare and run corporate and personal account applications with UAE banks, including the source of funds file, the business rationale and the follow up that decides the timeline, through our bank account opening service. And we handle residence and employment visas, Emirates ID and the medical stage for owners, directors and staff through our visa and residency service, because most banks will not finish an account for a company whose signatory has no residency in place.
Bottom line
UAE listed banks led the Gulf in the second quarter of 2026 on lending growth, return on equity and cost efficiency at the same time, with USD 816.5 billion of gross loans, 17.9% return on equity, a 24.2% cost-to-income ratio and USD 6.8 billion of net profit. Part of the lending growth was bought rather than earned, margins are narrowing, and the sector is leaning on volume to keep profit rising. For a business operating here that combination means banks with capacity and appetite to lend, and no relaxation whatsoever in what they ask for before they open the account.
FAQ
How much did UAE bank lending grow in the second quarter of 2026?
Gross loans at UAE listed banks rose 4.5% over the quarter to USD 816.5 billion, the strongest growth in the GCC for a second consecutive quarter. Oman followed at 4.1%, Kuwait at 2.3%, Bahrain at 1.9%, Saudi Arabia at 1.6% and Qatar at 1.4%. Across the Gulf, gross lending by 55 listed banks reached a record USD 2.59 trillion.
Which GCC banks are the most profitable?
UAE listed banks recorded the highest return on equity in the Gulf at 17.9% in the second quarter of 2026, against a regional average of 15.5%. Saudi banks came next at 15.7%, then Qatar at 14.5%, Oman at 11.5%, Kuwait at 11.1% and Bahrain at 10.2%. UAE banks also booked the largest net profit of any Gulf market at USD 6.8 billion, up 8.2% year on year.
What is a cost-to-income ratio and why is 24.2% significant?
The cost-to-income ratio shows how much operating expenditure a bank incurs for each unit of income it generates, so a lower figure means a leaner bank. UAE banks posted 24.2% in the second quarter of 2026, the lowest in the GCC, against a regional average of 28.2%, Qatar at 25.2% and Saudi Arabia at 28.4%. That efficiency is a direct contributor to the sector’s leading return on equity.
Does this report change anything for opening a company or a bank account in the UAE?
No. The Kamco Invest report is quarterly financial analysis of 55 listed banks, not a regulatory change, so no rule, fee, threshold or procedure moves because of it. What it signals is capacity: with a net loan-to-deposit ratio of 74.1% against a Gulf average of 85.9%, UAE banks have room to lend. Onboarding requirements are unchanged, and a complete file still decides how quickly an account opens.
