GCC banks to thrive as GDP tipped to hit 3.5% as UAE and Saudi lead growth.
GCC banks will continue to benefit from strong capital levels, supporting their overall performance in 2025, according to the EY GCC Banking Sector Outlook 2024 report.
In addition, the Brent crude price is expected to stay above $74 per barrel for 2025-27, which will help uphold banking sector resilience.
Credit growth in most GCC countries is broadly based on a strong project pipeline, with aggregate contract awards driven by infrastructure development, especially in Saudi Arabia and the UAE. Therefore, the positive trajectory in GCC banks is expected to continue in the near future. This outlook is also supported by rising lending volumes, increased fee income, stable margins and effective cost management. As the cost of lending becomes more favorable, GCC countries might expand their investments globally.
“Furthermore, resilient economies, the region’s economic diversification efforts and enabling policies will support higher consumption and investment, further boosting the sector’s performance. The upcoming financial year looks to be a transformative period, with advancements in technology, shifts in consumer behavior and regulatory changes shaping the future of banking.
GDP growth in the GCC is projected at 3.5 percent in 2025. Interest rate cuts, in addition to further investment and structural reform initiatives, will mean non-oil growth of over 3.4 percent in the region’s two largest economies.
Source: Economicmiddleseast
