UAE, Saudi, and Qatari Banks Boost Loans with Lower Interest Rates: Why?
Banks across the UAE, Saudi Arabia, and Qatar are ramping up their lending activities while reducing interest rates, following a trend of falling rates in the Gulf region.
Major institutions such as Emirates NBD, First Abu Dhabi Bank (FAB), and Saudi Arabia’s Al Rajhi Bank reported significant loan growth in the second quarter of 2025, with expectations for continued increases.
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Data from S&P Global Market Intelligence indicates that Al Rajhi Bank led the charge with a 19.3% rise in lending, nearly tripling its growth from the previous year.
FAB also raised its full-year loan growth guidance after posting a 10.7% increase, while Emirates NBD reported a 14.3% rise in loans during the same period.
Qatar National Bank (QNB) saw its loan book expand by 9.4%, prompting an upward revision of its growth forecast.
Analysts anticipate that loan growth will remain strong throughout the year as central banks in the region are expected to align with anticipated rate cuts from the US Federal Reserve.
As lending increases, banks are also experiencing a rise in net interest income (NII). QNB reported a 10% year-on-year increase in NII, while Al Rajhi Bank’s NII surged by 25%.
Despite some variations in profits, the overall outlook for the banking sector in the GCC remains positive, with improved access to credit and competitive borrowing costs for residents anticipated in the coming months.
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