RIYADH: Banks listed in the Gulf Cooperation Council posted record revenue of $37.4 billion in the fourth quarter of 2025, up 1.7 percent from the previous three months, as lending growth supported income despite pressure on margins.
In its latest analysis, Kamco Invest said the increase was driven by higher revenues reported by banks in Oman, Kuwait, Bahrain, and Saudi Arabia, while declines in the UAE and Qatar partially offset the gains.
The performance reflects broader economic momentum seen in the region in recent years, where non-oil sector expansion and government-led investment pipelines have supported credit demand and banking activity.
However, the outlook has become more uncertain following the US-Israel war with Iran that began in late February, although Fitch Ratings said GCC banking systems face limited immediate credit risks from the conflict due to strong capital, liquidity buffers and sovereign support.
In its latest report, Kamco Invest stated: “GCC-listed banks showed steady growth in revenues during the fourth quarter of 2025, with total bank revenue reaching a new record high level during the quarter.”
It added: “The growth was led by higher net interest income despite a fall in yield on credit and non-interest income, and was mainly led by consistent growth in lending.”
Kamco Invest analysis, however, added that net profits of listed banks in the region declined by 5.9 percent from the record high achieved in the third quarter to a four-quarter low of $15.6 billion in the final three months of 2025, driven by a rise in operating expenses.
“The decline (in net profit), which was seen in almost all the countries in the GCC barring Oman, mainly reflected higher impairments that more than offset the top-line growth. An increase in operating expenses for the second consecutive quarter also affected bottom-line performance,” added the report.
The expansion in credit facilities was broad-based in the fourth quarter, spanning most sectors and countries across the GCC and underpinned by a robust pipeline of projects.
Kamco Invest added that aggregate gross loans reported by listed GCC banks grew by 2.7 percent to reach $2.47 trillion at the end of the fourth quarter of 2025, supported by the growth of the non-oil economy in the region.
Net loans also showed healthy growth of 2.5 percent during the quarter to reach $2.37 trillion.
Customer deposits witnessed the first sequential decline in 19 quarters during the fourth quarter to reach $2.78 trillion, registering a 0.6 percent drop compared to the previous three months.
As a result of higher lending and a fall in customer deposits, the loan-to-deposit ratio for the GCC banking sector reached a new record high of 85.4 percent at the end of the fourth quarter, up from 82.8 percent in the previous quarter.
Source: www.arabnews.com