Solid quarter for UAE banks

UAE banks' 2Q 2026 earnings are telling a positive story: the credit overlays built up during the first quarter of the year are easing, and banks are coming out of a quarter that saw the peak of the conflict looking strong.

RBL consolidation props up ENBD’s balance sheet

Emirates NBD's 2Q net income came in flat at AED 6.4 bn, holding steady even as total income slipped 6% quarter-on-quarter to AED 13.5 bn — a dip management chalked up to softer non-funded income after a strong 1Q, according to its financials (pdf) and earnings release (pdf). The pullback was concentrated in non-funded income, which fell 18% q-o-q to AED 4 bn after a strong first quarter; net interest income held flat at AED 9.5 bn, with the net interest margin compressing to 3.16% (from 3.35% in 1Q).

The good news: Impairments actually eased through the year. 2Q impairment allowances came in at AED 0.6 bn, down 30% q-o-q from AED 0.8 bn in 1Q — bringing the H1 total to AED 1.4 bn. The NPL ratio improved to 2.1% (from 2.4% at end-2025), and cost of risk for the half came in at 42 bps, comfortably inside the bank's 30-50 bps guidance. Capital stayed strong post-acquisition, with CET-1 at 13.6%, though that's down from 14.4% at end-2025 as RBL's risk-weighted assets flowed through.

Meanwhile, net income for the first half of 2026 rose 3% y-o-y to AED 12.9 bn, with a heavier impairment charge (AED 1.4 bn), a bigger hyperinflation adjustment tied to DenizBank (AED 1.9 bn), and a a higher tax bill (AED 3.4 bn, up 16%), eating into the gains.

The balance sheet crossed AED 1.3 tn, and RBL Bank has now been folded in. Gross loans rose 17% YTD to AED 771 bn — with RBL adding AED 44 bn of it from the newly consolidated RBL — while deposits grew 13% to AED 892 bn, with RBL contributing AED 43 bn.

REMEMBER- RBL's acquisition completed on 18 June, so its income contribution reflects only the 13 days since close, not a full quarter — 3Q will be the first period where RBL's earnings show up at full run-rate.

FAB also had a good quarter

First Abu Dhabi Bank had higher income growth for the quarter, with net income rising 14% q-o-q and 4% y-o-y to AED 5.7 bn, according to its management discussion and analysis report (pdf). Operating income rose 7% y-o-y to AED 10.2 bn, with non-interest income jumping 16% q-o-q to AED 4.3 bn on a rebound in FX and investment income. Net interest income rose a steadier 5% q-o-q to AED 5.9 bn.

Income growth was broad-based: Net income for 1H 2026 rose only 1% y-o-y in 1H 2026 to AED 10.7 bn, with operating income rising 7% to AED 19.5 bn. Net interest income was up 14% to AED 11.5 bn on higher volumes, improved margins and stronger recoveries of interest in suspense, while non-interest income was roughly flat at AED 8 bn — net fees and commissions grew 20% on strong deal activity, but FX and investment income was down 7% y-o-y before its 2Q rebound.

Similar to Emirates NBD, impairment charges eased through the quarter, coming in at AED 950 mn, down 14% q-o-q — though still up 26% y-o-y from AED 752 mn in 2Q 2025. That brings the 1H total to AED 2.05 bn, up 39% y-o-y, which FAB attributed primarily to AED 650 mn of additional management overlays — a deliberate, forward-looking cushion rather than a sign of deteriorating credit quality. Excluding overlays, net income before tax rose 8% yoy rather than 3% for the first half.

ADCB reports record 2Q earnings

Strong loan growth and an uptick in non-interest income helped ADCB's net income rise 31% y-o-y to a record AED 3.4 bn in 2Q, according to its management discussion and analysis report (pdf). Operating income climbed 6% to AED 6 bn, helped by stronger fee and trading income and sharply lower impairment charges, it said in its financials (pdf).

Behind the results: The bank's net interest and Islamic financing income edged 2% higher to AED 3.7 bn, as non-interest income climbed 12% to AED 2.3 bn, driven by higher fee and commission income and stronger trading income, accounting for more than 38% of operating income.

On a 1H basis, net income increased 34% to AED 6.74 bn on record operating income of AED nearly AED 12 bn, up 12% y-o-y. Once again, non-interest income saw the biggest increase, rising 22% y-o-y to AED 4.5 bn. For 1H, its total assets rose 16% y-o-y to AED 833.2 bn, with net loans up 18% to AED 444.6 bn, while customer deposits increased 14% to AED 526.6 bn.

Rakbank 1H net income jumps 25%

Rakbank’s sale of its merchant acquiring arm boosted its bottomline, which rose 25% y-o-y to reach AED 1.7 bn in 1H, according to an earnings release (pdf). The lender sold the business to Network International for AED 551 mn, with the final transaction showing through as a AED 473 mn gain.

Total assets increased 14% to AED 108.6 bn, while customer deposits rose 23% to AED 75.1 bn, supported by what the bank described as stable funding and ample liquidity.