RIYADH: Gulf banks delivered stronger profits and healthier balance sheets in the first half of 2025 even as lower interest rates began to weigh on lending margins, a new report showed.
According to the EY GCC Banking Sector Outlook, average return on equity rose to 13.2 percent, driven by higher non-interest income and tighter cost controls.
Operating efficiency improved, with the cost-to-income ratio falling to 32 percent, while asset quality strengthened as non-performing loans declined to 2.4 percent from 2.8 percent a year earlier, the report added.
This strong performance is underpinned by a positive macroeconomic forecast for the GCC, with economic growth projected at 3 percent in 2025 before accelerating to 4.1 percent in 2026, supported by infrastructure spending, economic diversification, and vibrant private sector activity.
This comes as Kamco Invest reported that GCC-listed banks posted a record $16.2 billion in net profit in the second quarter, driven by higher revenues and efficiency gains that offset rising impairment charges.
