Lower interest rates spur strong loan growth at UAE banks amid Gulf-wide lending boom
A. SREENIVASA REDDY (ABU DHABI)Leading UAE banks posted robust loan growth and strong second-quarter profits in 2025, capitalising on a lower interest rate environment across the Gulf, according to a report by S&P Global Market Intelligence. The favourable monetary conditions helped stimulate lending across the GCC, but UAE lenders, particularly First Abu Dhabi Bank (FAB) and Emirates NBD, stood out for their growth momentum and upgraded full-year guidance.FAB, the country's largest bank by assets, reported a 10.71% year-on-year increase in loan growth, accelerating from 6.34% in the same period last year. The performance prompted FAB to upgrade its full-year loan growth guidance to the low double-digit range, from an earlier single-digit outlook. The bank also posted a record net profit of $1.50 billion in the second quarter, marking a 29% jump from $1.16 billion a year ago.Emirates NBD, another top-tier UAE bank, reported even higher loan growth at 14.28%, also revising its full-year guidance upward to the low double digits. Its net interest income (NII) grew 6% year-on-year to $2.28 billion. However, the bank's net interest margin (NIM) narrowed by 22 basis points to 3.36%, largely due to pressure from its Turkish subsidiary, DenizBank. A $31 million impairment charge dragged Emirates NBD's quarterly profit down by 10% compared to a year earlier, when the bank had posted a reversal of $374 million in provisions.The positive loan growth trend was mirrored across other Gulf markets, with Saudi Arabia's Al Rajhi Bank reporting the sharpest year-on-year rise among major regional lenders. Al Rajhi's loan book expanded by 19.31%, up from 7.37% a year earlier. The bank also posted a 25% jump in NII to $1.95 billion, supporting a 31% rise in net profit to $1.64 billion for the quarter.Qatar National Bank (QNB) posted 9.38% loan growth and revised its full-year loan guidance to 7%–9%, up from 5%–7%. Almost half the growth stemmed from Turkey, according to Durraiz Khan, senior vice president for group financial consolidation. QNB's NII rose to $2.34 billion, up from $2.12 billion a year ago, although margin pressures persisted due to high rates in Turkey. Khan noted that a projected rate cut in Turkey could aid NIM recovery in the second half of the year.Saudi National Bank also recorded solid loan growth, rising to 12.21% from 10.25% in the prior-year quarter.Other UAE-based banks, such as Abu Dhabi Commercial Bank (ADCB) and Dubai Islamic Bank (DIB), also saw steady growth. ADCB reported high single-digit loan growth and continued to expand its retail and SME lending book. DIB maintained its strong performance in corporate and Islamic finance segments, benefitting from improved liquidity and lower funding costs.
S&P analysts said they expect loan growth momentum to continue in the UAE, Saudi Arabia, and Qatar, supported by anticipated US Federal Reserve rate cuts later in the year, which Gulf central banks are expected to follow. As rates soften further, banks in the region—particularly those with diversified portfolios and strong funding bases—are poised to benefit from increased credit demand and margin stabilisation.
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Al Etihad
4 hours ago
- Al Etihad
Etihad Rail lays tracks for economic growth, new investment opportunities
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Hi Dubai
4 hours ago
- Hi Dubai
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Where Dubai Businesses Are Already Using These Smart Moves Smart packaging is no longer theoretical—it's already being used by Dubai brands to up their game across sectors like e‑commerce, F&B, beauty, and packaging manufacturing. 1. E-commerce Brands Using Branded Unboxing to Stand Out Top Dubai-based online businesses now treat packaging as a core marketing touchpoint. Think custom-printed boxes with consistent branding, coloured tissue paper, and thank-you notes—designed to deliver an emotional first impression. These thoughtful details turn a routine delivery into a memorable experience—and frequently, an unboxing moment captured on social media. Isn't it powerful when a customer shares their first impression of your brand before even using the product? 2. F&B Companies Adopting Eco-Packaging to Meet Green Expectations In the food and beverage sector, sustainability is fast becoming a baseline requirement. 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Also read: Why Store Design and Product Placement Are Key to Retail Success in Dubai Learn how smart store design and product placement can boost retail sales, customer engagement, and footfall for businesses in Dubai. How to Expand Your Startup Using Micro-Entrepreneur Network Discover how Dubai startups can grow faster by tapping into micro-entrepreneur networks for support, collaboration, and real opportunity. Clear Dead Inventory: UAE Retailers' Guide to Smart Stock Moves Learn how UAE retailers can spot and clear dead inventory early to protect margins, save space, and improve buying decisions.
TECHx
6 hours ago
- TECHx
Mastercard and Monak Launch Digital Platform for Workers
Home » Emerging technologies » Fintech » Mastercard and Monak Launch Digital Platform for Migrant Workers Mastercard has announced a partnership with Monak, an Oman-based fintech company, to launch a digital financial services platform. The platform aims to improve cross-border money transfers for migrant workers. It also streamlines wage disbursement and onboarding processes for employers. This initiative addresses key challenges faced by migrant workers, a group often underserved by formal financial services. By offering seamless money movement and expense management tools, the platform reduces delays caused by slow onboarding. It also lowers the cost and complexity of basic financial services. These efforts support broader financial inclusion. According to the UN Department of Economic and Social Affairs, GCC countries host over 30 million foreign workers, making up more than half of the region's population. This highlights the importance of Monak's focus on migrant workers. The company equips users with skills to navigate the digital financial landscape. Mastercard's Senior VP, Muhammad Nana, said the partnership advances financial inclusion and empowers migrant workers to participate fully in the digital economy. Meanwhile, Monak's co-founder Said Salim Al Shanfari emphasized the platform's role in inclusive digital transformation across the Middle East, Asia, and Africa. Employers also benefit from integrated recruitment, onboarding, and payroll tools. The platform enables timely wage payments and fast, secure remittances back to workers' families. This enhances worker satisfaction and operational efficiency. Monak also promotes digital and financial literacy to empower users beyond just financial access. The company recently joined the Sanabil 500 MENA Seed Accelerator Program, highlighting its commitment to innovation. Partnership targets financial inclusion for migrant workers Platform simplifies cross-border payments and payroll Monak recognized by Sanabil 500 MENA Accelerator Program
