Ernst & Young (EY) has confirmed the robust performance of banks in the UAE, driven by an increase in non-interest income and stable asset quality. The banks have shown improvements in profitability, asset quality, and capital. Furthermore, strong credit growth has been noted, attributed to economic transformation programs that stimulate lending activities.
In its report on banking services in the Gulf Cooperation Council (GCC) for the first half of 2025, EY indicated that this trend is likely to continue, especially with the announcement of additional interest rate cuts in September 2025. Meanwhile, banks are actively working to diversify their revenue streams and enhance operational efficiency.
The report projects that the GCC economies will grow by 3% in 2025, with growth accelerating to 4.1% in 2026. This growth is anticipated to be supported by infrastructure investments, diversification initiatives, and a dynamic private sector. Additionally, it is expected that oil GDP will recover by 1.7% in 2025, followed by a rise to 5.4% in 2026, while non-oil sectors lead the way, buoyed by ongoing reforms and a surge in foreign investment.