Banks in UAE look beyond lending to sustain profit surge

By the Editorial Team · Monday, November 2, 2026

UAE banks reported higher profits in the first nine months of 2026 driven by loan growth, increased fee income, and better credit quality despite mixed net interest margin performance. Managing rising funding costs will be critical as lenders expand their loan portfolios amid tighter liquidity conditions and shifting economic factors.

Banks in the United Arab Emirates are maintaining earnings growth through expanded lending, increased fee income, and improved credit quality, according to recent third-quarter financial disclosures. However, rising funding costs are emerging as a key consideration as the sector prepares for further loan book expansion.

The country’s three largest listed lenders by market capitalization—First Abu Dhabi Bank (FAB), Emirates NBD, and Abu Dhabi Commercial Bank (ADCB)—all reported higher net profits for the first nine months of 2026. Additionally, Abu Dhabi Islamic Bank (ADIB), Mashreq, and Dubai Islamic Bank (DIB) showed notable increases in financing volumes or revenue streams, highlighting a broader trend of business growth across both conventional and Islamic banking segments.

FAB’s results indicated that net interest margin pressure varied across the sector. The bank’s net interest margin improved by five basis points year-on-year, reaching 1.93%, supported by a 10% increase in loans since December 2025. This contributed to a 3% rise in net profit over the nine-month period. In contrast, Emirates NBD and ADCB experienced narrower margins following interest rate cuts in late 2025 but compensated with stronger loan volumes and other income streams.

Market analyst Nagham Hassan of eToro noted that margins declined at Emirates NBD, ADCB, and DIB, yet income continued to grow. Emirates NBD’s total income rose by 15%, while ADCB’s non-interest income increased by 21%. Emirates Islamic, a subsidiary of Emirates NBD, saw operating profit increase by 7% despite a largely stable net profit. ADIB’s financing portfolio expanded by 25% year-on-year, and Mashreq’s customer loans grew by 33%, further confirming sustained credit growth. DIB reported a 7% rise in gross revenue, underscoring ongoing momentum across both conventional and Islamic banking operations.

A significant factor gaining prominence is the cost and composition of funding. Hassan highlighted that loans grew faster than deposits at key banks including ADCB, Emirates NBD, Commercial Bank of Dubai, and DIB, raising potential concerns over funding costs and liquidity management. Some institutions benefit from substantial low-cost deposits, with non-interest-bearing current and savings accounts making up 60% of ADIB’s deposit base and 58% at Mashreq, helping to mitigate rising funding expenses.

Lower provisions, recovery of previously impaired loans, and gains on asset disposals also played varied roles in boosting individual banks’ profits during the reporting period. Moving forward, analysts suggest that managing the cost of funding will be crucial as UAE lenders pursue the next phase of credit growth amid evolving monetary and economic conditions.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.