Gross loans by listed UAE banks grew 6.2% q-o-q to reach USD 714.4 bn in 3Q 2025, marking the largest quarterly increase in the GCC, Kamco Invest said in its latest banking sector quarterly report (pdf). On a sectoral level, lending showed a “broad-based growth,” except for personal loans for business, which dipped 3.1%.

Total customer deposits in the UAE rose 4.4% q-o-q to USD 981.9 bn, the highest volume in the GCC. While demand deposits in the country saw a decline, this was more than offset by an increase in savings and other deposit categories.

The UAE banking sector’s loan-to-deposit ratio increased for the second consecutive quarter to 69.4%. While this represented one of the highest levels for the UAE historically, it remained the lowest ratio in the GCC, indicating significant liquidity remains within the system.

Total revenues rose 3.4% for the quarter, standing at USD 13.7 bn, the highest in the region, supported by a 1.3% rise in non-interest income of USD 5.7 bn. Meanwhile, net interest income for the UAE-listed banks climbed 5.1% q-o-q, reaching USD 8.0 bn.

The sector’s cost-to-income ratio remained efficient at 37.9%, one of the lowest in the GCC despite the rise in costs and a marginal increase in impairments, with a cost of risk of 0.49%, as well as a double-digit q-o-q increase in operating expenses during 3Q.

Net interest margins for the UAE decreased to 3.19% from 3.26% in the previous quarter as the impact of interest rate cuts began to filter through the loan books. Still, the UAE topped the region in profitability, with the aggregate return on equity ticking up to 16.6%.

The data checks out: Alvarez and Marsal recently reported a 4.3% q-o-q increase in net income of the UAE’s 10 largest listed banks to AED 23.6 bn, attributing this resilience to stronger net interest income and a 7.3% rise in fee income, as well as a sharp 24.3% drop in impairment charges. It also mentioned strong lending momentum, which was up 6.5% q-o-q.

For the year ahead: Growth in 2026 is expected to be slightly better in the UAE and Saudi Arabia as they benefit from economic transformation efforts, leading to faster non-oil sector expansion. The UAE’s banking sector is also anticipated to see moderation in performance with strong loan growth rates, well above GCC levels, Fitch Ratings said in a report seen by EnterpriseAM.

**Stay tuned for a year-ahead on the general consensus among economists and analysts on the UAE’s economy and banking sector performance in the coming.

The GCC at large

Listed banks across the GCC maintained a strong performance in 3Q 2025, with net income reaching USD 16.6 bn, according to the report. This was up 11.6% y-o-y and 2.2% q-o-q, and was fueled by a broad-based surge in revenues and a declining cost-to-income ratio that helped offset rising impairments.

Lending by listed GCC banks reached USD 2.41 tn, growing 3.6% q-o-q — the second-highest quarterly increase in over four years — and maintaining double-digit annual growth of 13.5% y-o-y.

Total customer deposits reached a new record of USD 2.8 tn, though q-o-q growth slowed to a three-quarter low of 2.1% as the overall regional increase was tempered by a decline in customer deposits at Saudi banks.

Meanwhile, aggregate net loan-to-deposit reached a record of 82.8% — well above the 80% mark — climbing more than 100 bps both sequentially and annually to reflect improved asset utilization and better margins, while Saudi banks pushed the country-level ratio to a record high of 97.6%.

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