Banks across the Gulf Cooperation Council delivered record revenues of $37.4 billion in the fourth quarter of 2025, highlighting sustained lending momentum even as margins came under pressure.

According to an analysis by Kamco Invest, revenues rose 1.7% quarter on quarter, supported mainly by strong credit growth across key markets. Gains were led by banks in Oman, Kuwait, Bahrain, and Saudi Arabia, while softer performance in the UAE and Qatar partly weighed on overall growth.

The results reflect a broader economic tailwind across the GCC, where government-backed investment pipelines and accelerating non-oil sector activity continue to fuel demand for financing.

“GCC-listed banks showed steady growth in revenues during the fourth quarter of 2025, with total bank revenue reaching a new record high during the quarter,” Kamco Invest said. The firm added that revenue expansion was largely driven by higher net interest income, even as yields on credit and non-interest income declined.

However, profitability told a different story. Net profits for listed banks fell 5.9% from the previous quarter’s peak to $15.6 billion, marking a four-quarter low. The decline was attributed to rising operating expenses and higher impairments, which outweighed top-line growth across most markets except Oman.

“The decline mainly reflected higher impairments that more than offset the top-line growth,” the report said, adding that operating costs rose for the second consecutive quarter, further weighing on bottom-line performance.

Credit expansion remained broad-based across sectors and geographies, supported by a strong pipeline of infrastructure and development projects. Aggregate gross loans increased 2.7% to $2.47 trillion by the end of the quarter, while net loans rose 2.5% to $2.37 trillion.

At the same time, customer deposits recorded their first sequential decline in nearly five years, falling 0.6% to $2.78 trillion. The gap between rising loans and declining deposits pushed the sector’s loan-to-deposit ratio to a record 85.4%, up from 82.8% in the previous quarter.

Looking ahead, the outlook remains mixed. While the underlying fundamentals, such as capital strength and liquidity buffers, remain solid, geopolitical tensions have introduced new uncertainty into the operating environment.

Still, Fitch Ratings said GCC banking systems face limited immediate credit risks, citing strong sovereign backing and resilient balance sheets.