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UAE banks have performed exceptionally well in 1H 2025, outperforming their GCC peers in terms of share price growth and other internal metrics like loan growth and return on equity, on the back of strong macroeconomic conditions, CI Capital noted in a recent report seen by EnterpriseAM UAE. CI Capital upgraded the target prices across the UAE banks it covers, reflecting their strong performance during the six-month period. Stock prices for these banks have jumped an average of 50% YTD.
What are the UAE banks covered? The top five Emirati banks covered in CI Capital’s report are Abu Dhabi Commercial Bank (ADCB), First Abu Dhabi Bank (FAB), Emirates NBD, Abu Dhabi Islamic Bank (ADIB), and Dubai Islamic Bank (DIB).
UAE banks’ continued to see profitability gains during the period, with return on equity (RoE) surpassing that of their GCC peers by 5.8 percentage points.
Robust loan growth powers banks’ momentum: Higher than anticipated loan growth in 1H 2025 — averaging 9.5% YTD across the UAE banks covered in the report — has paved the way for growth in the mid-high teens in 2025, the report noted. This robust lending activity was supported by solid lending to government-related entities, credit cards, and retail lending, which was boosted by healthy mortgage demand. CI Capital projects an average compound annual growth rate for loans of 9.7% from 2025 to 2027 for the banks.
ADIB + DIB to lead loan growth in 2025:The brokerage highlighted ADIB (+19%) and DIB (+16%) as strong performers in loan growth this year, underpinned by ADIB’s strong retail offering and DIB’s “healthy retail home finance franchise and diversified corporate loan pipeline.”
Looking ahead, the brokerage firm expects RoEs to stay resilient at an average of 19.7%, despite expected pressure on margins from additional rate cuts. The Central Bank of the UAE (CBUAE) kept interest rates unchanged for the fifth time in a row at its meeting in July, but the US Federal Reserve is expected to resume its easing cycle this fall, with GCC central banks likely to follow suit.
UAE banks are also well placed to tap into Saudi Arabia’s strong growth prospects through cross-border lending, thanks to their strong liquidity. As of June 2025, the average loan-to-deposit (LTD) ratio for these banks was 80.3%, which is 22 percentage points below Saudi peers’ average. Emirates NBD already ranks as the Kingdom’s largest foreign bank by assets, while ADCB is in the process of establishing its first branch in the kingdom. Meanwhile, 11% of ADIB’s balance sheet comes from Saudi operations, as the bank aims to increase its international lending to 30% of its total loan book. As for FAB, international operations accounted for nearly half of FAB’s plan growth in the first half of this year.
UAE banks hold a competitive edge over GCC peers: The UAE’s banks have “the strongest net external asset position” among GCC countries, giving them the highest resilience to any potential capital outflows resulting from current volatility in the market, ratings agency S&P Global said in April.
