S&P Global reported that the top five Gulf banks saw higher lending income growth in the fourth quarter of 2024, despite an anticipated slowdown due to lower global interest rates.
The agency’s report revealed that the net accumulated lending income of Qatar National Bank, Emirates NBD, Abu Dhabi First, National Bank of Saudi Arabia, and Al Rajhi Investment grew by approximately 9% in the fourth quarter of 2024 compared to the same period in 2023, reaching $9.7 billion, up from $8.9 billion in the fourth quarter of 2023.
Interest Income
The agency also noted that Emirates NBD’s net interest income increased in the fourth quarter of 2024 to $2.3 billion, up from $2.1 billion in the same period of 2023. It highlighted that the improvement in interest income from the bank’s unit in Turkey helped partially offset the decline in overall interest income margins.
Al Rajhi Investment Bank saw a significant increase in net interest income, rising by over 32.4% in the fourth quarter of 2024 to reach $1.4 billion. Similarly, the National Bank of Saudi Arabia reported a 12.1% growth in net interest income, also totaling $1.4 billion.
Both banks noted that their net interest income for the entire year set new records, driven by the increasing demand for loans, which was bolstered by the Saudi government’s large-scale infrastructure projects in line with its Vision 2030 initiatives.
Stable Profitability
Standard & Poor highlighted that Qatar National Bank and First Abu Dhabi Bank reported higher quarterly net income in the final quarter of 2024 compared to the same period in 2023.
In contrast, Emirates NBD saw a decline in its net income for the same period. The report also pointed out that Al Rajhi Investment Bank experienced the most significant income growth among the banks in the sample.
Analysts from Bank of America noted that the robust profitability of the Saudi bank plays a key role in driving both budget growth and the expansion of its annual profits.
The agency forecasts that Saudi banks will maintain stable profitability in 2025, with increased lending activity offsetting the impact of lower interest margins. A rebound in corporate lending and real estate loans is expected to drive credit growth in the Kingdom’s banks by approximately 10% this year.
Lending Income Improves in Türkiye
The agency noted that Qatar National Bank, the largest Gulf bank in the report’s sample, made the biggest contribution to loan interest income, reaching $2.4 billion in the fourth quarter of 2024, up from $2.2 billion in the same period in 2023.
The group’s CFO, Ramzi Marei, commented that this growth is attributed to the increased lending income from operations in Turkey, where net interest income doubled in the second half of last year compared to the first half. They expect 2025 to be a financially stronger year for the bank’s business in Turkey.
