The figure, covering 55 listed GCC banks, was 2.6% higher than in the first quarter and 11.6% above the level a year earlier, according to Kamco Invest
GCC banks ended the second quarter with a record USD 2.59 trillion in gross lending, as credit growth accelerated across all six Gulf markets and lenders benefited from resilient regional economies, investment activity and stronger corporate demand.
The figure, covering 55 listed GCC banks, was 2.6% higher than in the first quarter and 11.6% above the level a year earlier, according to Kamco Invest.
Net loans rose 2.7% during the quarter to USD 2.51 trillion. Islamic banks outpaced conventional lenders, with financing increasing 3.3%, compared with 2.4% for conventional banks.
The UAE remained the strongest growth market. Gross loans at UAE-listed banks rose 4.5% in the quarter to USD 816.5 billion, the fastest increase in the GCC for a second consecutive quarter.
Emirates NBD’s acquisition of a majority stake in India’s RBL Bank also boosted the UAE figures, adding about USD 12 billion of loans to the group.
Saudi Arabia retained the region’s largest loan book, at USD 876.1 billion, but quarterly growth was more measured at 1.6%.
Data cited by Kamco showed Saudi private-sector credit expanding 6.8% year on year in June, below the 16%-18% growth rates seen through much of 2025.
Oman recorded the second-fastest quarterly expansion, with loans rising 4.1% to USD 88.2 billion. Kuwaiti banks increased lending 2.3% to USD 290.6 billion, while Bahrain and Qatar recorded growth of 1.9% and 1.4%, respectively.
The fact that every GCC market recorded sequential growth points to a broad-based improvement rather than a recovery concentrated in one economy.
The pattern reflects the Gulf’s wider economic transition.
Large-scale infrastructure programmes, diversification strategies and private-sector expansion are generating financing requirements beyond traditional oil-linked activity.
At the same time, borrowers have more alternatives through sukuk and bond markets, giving companies greater flexibility over funding sources and pushing lenders to compete on pricing, service and transaction banking capabilities across the region.
The lending rebound is also changing the way Gulf banks generate earnings. With much of the repricing cycle behind them and interest rates easing, lenders are increasingly relying on loan volumes rather than higher rates to expand interest income. Kamco said banks were using business volumes to support the interest line as the benefit from earlier rate repricing fades.
That shift was visible in second-quarter results. Aggregate net profit for the 55 banks reached a record USD 17.7 billion, up 5.6% from the first quarter and 7.2% from a year earlier. Total revenue rose 2.4% sequentially to USD 36.2 billion.
Net interest income increased 1.9% to a record USD 24.9 billion, while non-interest income rose 3.6% to USD 11.3 billion. Non-interest income accounted for 31.2% of total revenue, highlighting the growing importance of fees, commissions, investment banking and other businesses as lending margins come under pressure.
The regional net interest margin edged down to 2.78% from 2.79% in the previous quarter. The modest decline reinforces the challenge facing banks: maintaining earnings growth as the contribution from higher lending rates diminishes.
Funding is another issue. Customer deposits at listed GCC banks increased 1.7% in the second quarter to a record USD 2.92 trillion, slower than the expansion in loans.
The divergence is particularly important in Saudi Arabia, where the loan-to-deposit ratio at listed banks remained above 100% for a third consecutive quarter, pointing to a structural funding gap.
That gap is encouraging greater use of wholesale debt markets. Saudi issuers raised USD 49.3 billion through bonds and sukuk in the first half of 2026, accounting for close to half of total GCC issuance.
Corporate borrowers made up the majority of regional issuance, underlining the growing role of capital markets in funding investment alongside banks.
The outlook remains constructive but less exuberant. S&P Global Ratings expects average GCC bank credit growth of 5%-6% in 2026, with Saudi Arabia and the UAE recording stronger high-single-digit expansion.
For the Gulf’s lenders, the second quarter therefore marked more than a record balance-sheet number.
The UAE is emerging as the region’s clearest growth leader, while Saudi banks face the more immediate challenge of funding rapid credit expansion.
Across the GCC, however, the record lending figure points to continued demand for capital as governments and companies push ahead with infrastructure, diversification and private-sector investment.
