Top 10 banks post 4.3% q-o-q rise in net income in 3Q 2025, rebounding from a flat 2Q

The UAE’s 10 largest listed banks booked a combined net income of AED 23.6 bn in 3Q 2025, marking a 4.3% q-o-q increase, boosted by stronger net interest and fee incomes, according to Alvarez and Marsal’s UAE Banking Pulse report (pdf). This comes after a 2Q that saw flat earnings growth for banks on the back of higher impairments.

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Impairment charges slipped 24.3% q-o-q, with net loan loss falling 6.9% to AED 2.7 bn, reducing the sector’s cost of risk to 0.45% from 0.51% in 2Q.

Earnings remained resilient as banks maintained “sound capital and liquidity buffers, and a continued improvement in asset quality,” A&M Managing Director, Risk & Reg Financial Services, Zeeshan Mansoor said.

Still, the expansion was slightly muted by a 4.9% q-o-q dip in other operating income and a 6.3% q-o-q increase in operating expenses. Fees and commission income, however, rose 7.3% q-o-q, and interest continued to play a big role, as net interest income edged up 5.0% to AED 26.5 bn. Operating income rose 3.0% q-o-q to AED 41.9 bn. Meanwhile, return on equity ticked up to 19.6%, while return on assets eased slightly to 2.1%

Margins remained resilient amid interest cuts: The aggregate net interest margin fell 2 bps q-o-q to 2.45% as rate cuts filtered through.

REMEMBER- The Central Bank of the UAE cut interest rates for the third time this year on Tuesday, lowering them by 25 bps in line with the US Federal Reserve’s decision. The base rate applicable to the overnight deposit facility was cut to 3.65%, while the rate applicable to borrowing short-term liquidity remains the same at 50 bps above the base rate for all standing credit facilities. The CBAUE trimmed rates by 25 bps in September followed by another cut by the same rate in October following the Fed’s moves.

Lending momentum accelerated: Net loans and advances grew 6.5% q-o-q (up from 5% growth in 2Q), led by corporate and wholesale (+7.5%) and retail (+4.4%). Emirates NBD, representing 25% of the total gross loans and advances, logged the fastest loan growth, with 10.7% q-o-q growth, followed by FAB (24.7%) and Abu Dhabi Commercial Bank (16.6%).

Loan growth outpaced deposits, which grew 4.3% q-o-q largely on the back of accelerating time deposits, which constitute 43.8% of total deposits, and grew 9.6% q-o-q as depositors leverage higher interest rates ahead of further rate cuts.

Asset quality remained strong: The sector-wide non-performing loan ratio fell to 2.6%, while coverage improved by 4.1% q-o-q to 115.2%. Stage 3 loans declined 5.9% q-o-q, led by sharper drops at First Abu Dhabi Bank (FAB).

The 10 largest banks by assets analyzed by the report are FAB, Emirates NBD, ADCB, DIB, our friends at Mashre, ADIB, Commercial Bank of Dubai, Rakbank, Sharjah Islamic Bank, and National Bank of Fujairah (AED 68.0 bn).