The Arab banking sector has seen significant growth in 2023, with banks in the UAE holding the largest share of assets at 24.3 per cent, according to the Arab Monetary Fund (AMF). The UAE banking sector’s asset growth reached 11 per cent, driven by credit and investments, while Saudi banks saw a 9.3 per cent growth. Total assets of the Arab banking sector reached $4.574 trillion, with the UAE and Saudi banks leading the way.
The growth in the assets of the Arab banking sector reflects customer and market confidence in the banking sector, despite regional and global instability. The UAE, Saudi Arabia, and Qatar accounted for 58.9 per cent of total assets in the Arab banking sector, with the GCC projected to represent 73.1 per cent by the end of 2023. The Central Bank of the UAE noted that the country benefitted from favorable domestic conditions in 2023, supporting sustainable economic growth.
Listed banks in the GCC reported a record-high net income during Q2-2024, with a 2.6 per cent quarter-on-quarter growth. Total loan loss provisions reached their lowest level in at least 33 quarters, indicating an improving economy and credit quality. Central bank interest rates remained unchanged in the GCC, leading to a new peak in net interest income and a marginal increase in aggregate bank revenue.
Data from central banks in the GCC showed higher lending rates during Q2-2024, with UAE banks reporting the strongest quarterly growth at 3.4 per cent. Saudi Arabian banks followed closely with a 3.1 per cent growth. Aggregate gross loans reached a new high of $2.1 trillion, with the UAE leading in retail lending growth. Saudi-listed banks also saw healthy growth in lending across all sectors.
Overall, the Arab banking sector has shown resilience and growth, with the UAE and Saudi Arabia leading the way in asset growth and customer confidence. The Central Bank of the UAE continues to implement robust regulatory measures to support sustainable economic growth and maintain the country’s position as a leading financial hub. With favorable domestic conditions and proactive risk management, the financial sector in the GCC remains stable and competitive, despite global economic challenges.
