Gross lending by 55 listed banks in the Gulf Cooperation Council (GCC) region reached a record $2.59 trillion at the end of the second quarter of 2026, marking an increase of 2.6 percent from the previous quarter and 11.6 percent year on year, according to data compiled by Kameco Invest. This quarterly growth accelerated from 2.2 percent recorded in the first quarter.
Net loans rose 2.7 percent to $2.51 trillion, with Islamic banks showing a stronger increase in financing of 3.3 percent compared to 2.4 percent growth among conventional lenders. The expansion reflects sustained demand for credit amid resilient economies across the GCC, although banks are now navigating an evolving interest rate environment characterized by easing rates and slower credit expansion.
Among the GCC countries, banks in the United Arab Emirates led loan growth for the second consecutive quarter, with gross loans rising 4.5 percent to $816.5 billion. This expansion was partly driven by Emirates NBD’s strategic acquisition of a majority share in India’s RBL Bank, adding around 44 billion Emirati dirhams ($12 billion) in loans to the banking group’s portfolio over the quarter, bringing its total lending to $876.1 billion. Meanwhile, data from the Saudi Central Bank cited by Kameco highlighted year-on-year private sector credit growth of 6.5 percent as of June, a slowdown from rates between 16 percent and 18 percent in 2025. The moderation was attributed to a slowdown in retail mortgage growth and a shift toward increased corporate lending.
Omani banks recorded the region’s second-fastest quarterly loan growth at 4.1 percent, reaching $38.2 billion. Banks in Kuwait saw loans grow by 2.3 percent to $290.6 billion, while lenders in Bahrain and Qatar experienced more modest gains of 1.9 percent and 1.4 percent, respectively.
Customer deposits across listed GCC banks reached a quarterly record of $2.92 trillion, rising 1.7 percent but at a slower pace than lending. Aggregate net profit for the sector increased to a record $17.7 billion in the second quarter, up 5.6 percent from the previous quarter and 7.2 percent compared with the same quarter last year.
Total banking revenue climbed 2.4 percent from the first quarter to $36.2 billion. Non-interest income grew 3.6 percent to $13.3 billion, accounting for 31.2 percent of total revenue, while net interest income rose 1.9 percent to a record $24.9 billion. The regional net interest margin saw a slight decline to 2.78 percent, down from 2.79 percent in the previous quarter.
Looking ahead, S&P Global Ratings projects average credit growth among GCC banks to range between 5 and 6 percent in 2026, with higher growth anticipated in Saudi Arabia and the UAE, potentially reaching high single digits. However, the rating agency forecasts a modest decline in profitability over 2026 and 2027 due to increased credit costs and slower lending growth. Nevertheless, banks’ robust capital buffers are expected to maintain financial stability throughout this period.