S&P Global expects GCC banks to continue strong performance in 2025

S&P Global expects the GCC banks to continue their strong performance in 2025, noting that they are profitable, benefit from strong asset quality indicators and strong capitalization, and have sufficient liquidity on their balance sheets.
 

However, the banks will likely be modestly affected by lower interest rates, the agency noted.
 

"The unanticipated, severe increase in geopolitical risk or a major decline in oil prices could weigh on banks’ creditworthiness," S&P said. "Depending on how the scenario unfolds, we expect banks will be relatively resilient."
 

The GCC countries will also benefit from the implementation of economic transformation projects, especially Saudi Arabia, the agency said. It noted that the GCC banks will continue to grow their lending books without generating major macroeconomic imbalances.
 

According to the report, lending will range from a high 8%-9% in Saudi Arabia and the UAE to a modest 3%-6% in other GCC countries.
 

"We expect asset quality indicators will remain broadly stable over the next 12-24 months," S&P said.