Listed banks across the Gulf Cooperation Council (GCC) region reported a combined net profit of $16.8 billion in the first quarter of 2026, marking a solid rebound from the previous quarter's decline, according to a report by Kamco Invest. The aggregate net profit grew 4.6 percent quarter-on-quarter and 5 percent year-on-year, driven by broad-based growth across most countries in the region.
This recovery comes amid a complex global interest rate environment shaped by ongoing Middle East conflicts, elevated energy prices, and divergent monetary policies worldwide. The strong performance aligns with an analysis by S&P Global in March, which indicated that the GCC banking sector faces limited short-term credit risk from regional tensions, supported by strong financial buffers and sovereign backing.
Quarterly Performance and Revenue Trends
In the fourth quarter of 2025, net profits had declined by 5.9 percent from a record high to reach a four-quarter low of $15.6 billion, driven by a rise in operating expenses. The first quarter of 2026 reversed that trend, with Kamco Invest noting that the increase was led by broad-based growth across country aggregates, with only Oman registering a decline.
Aggregate banking sector revenues in Q1 2026 reached a new record high of $35.3 billion, though the growth rate was the smallest in four quarters at 0.9 percent. Net interest income showed marginal quarter-on-quarter growth of 0.1 percent to $24.4 billion, while non-interest income provided a stronger lift of 2.6 percent, contributing to the overall revenue increase.
Credit Momentum and Sectoral Lending
Total outstanding credit facilities across the GCC reached approximately $2.17 trillion by the end of March, up 9.2 percent year-on-year, according to Kamco Invest. Saudi Arabia dominated with over 41 percent of regional credit, followed by the UAE at 27 percent and Qatar at 18 percent.
Lending growth was broad-based, led by key sectors aligned with diversification agendas such as Saudi Arabia's Vision 2030 and Oman's Vision 2040. Kamco Invest stated: "This sustained credit growth reflects the region’s continued economic diversification efforts, robust infrastructure spending, and supportive monetary policies despite global economic uncertainties."
Saudi Arabia's banking credit reached SR3.36 trillion ($894.8 billion) at end-March 2026, growing 8.2 percent year-on-year and 1.8 percent year-to-date. The Kingdom's Vision 2030 megaprojects continue to drive sectoral lending patterns. The transportation and communications sector led credit growth, expanding 25.2 percent year-on-year to SR75.5 billion, supported by investments in logistics hubs, ports, and telecommunications infrastructure. Credit in electricity, water, gas, and the health sector grew 22.8 percent year-on-year to SR222.9 billion, backed by large-scale investments in power generation, desalination plants, and healthcare facilities. The building and construction sector saw an annual increase of 9.2 percent to SR143.5 billion, providing vital support to major real estate and tourism megaprojects such as Neom and the Red Sea Project.
The UAE's banking credit reached 2.14 trillion dirhams ($582.4 billion) at the end of March, demonstrating the strongest year-on-year growth in the GCC at 14.4 percent, with year-to-date expansion of 4.4 percent. Aggregate gross loans by listed banks hit a record $2.53 trillion, growing 2.2 percent quarter-on-quarter (the slowest sequential pace in eight quarters) but a healthy 12.3 percent year-on-year rise.
Deposit Growth and Loan-to-Deposit Ratio
Customer deposits reached a new high of $2.87 trillion, expanding 3.4 percent compared to the previous three months (the strongest pace in three quarters) and 8.7 percent year-on-year. Oman and the UAE led deposit growth. Kamco Invest reported: "At the country level, Oman-listed banks registered the strongest growth in deposits during the quarter that reached $90.4 billion at the end of the first quarter of 2026, with a growth of 4.9 percent. UAE-listed banks were next, with customer deposits breaching the $1 trillion mark to reach $1.04 trillion after a quarter-on-quarter growth of 4.7 percent."
The sector's loan-to-deposit ratio stood at 85 percent, slightly down from the prior quarter's record but still elevated, reflecting improved asset utilization. Kamco Invest noted: "The ratio increased year on year by more than 300 bps during the quarter and has remained consistently above the 80 percent mark over the last eight quarters and reflects improving asset utilization as well as better margins to offset pressure from declining interest rates."
Net Interest Income by Country
Net interest income showed only marginal quarter-on-quarter growth of 0.1 percent to $24.4 billion. At the country level, the trend remained mixed, with three country aggregates showing declines and three showing growth. Kamco Invest stated: "Omani banks once again ranked first in terms of growth in net interest income at 3.3 percent to reach $600 million. Kuwaiti and Saudi-listed banks were next with growth of 1.6 percent and 1.0 percent, respectively, to reach $8.5 billion and $2.7 billion during the first quarter." It added: "Bahraini banks showed the biggest decline in net interest income that reached $700 million, falling by 5.2 percent. Qatari and UAE-listed banks also showed marginal declines of 1.1 percent and 0.5 percent, respectively."
