According to data from Kamco Invest quoted by Arab News, GCC banks’ gross loan hit a record $2.59 trillion at the end of the second quarter of 2026, up 2.6% from the previous quarter and 11.6% from the same period last year. During the quarter, lending increased in all six Gulf markets.
Stronger business financing demand, ongoing economic activity, and a change in banking tactics as interest-rate repricing cycles enter a new phase are all factors contributing to the increase.
Why Is Lending at GCC Banks Increasing?
The growth of GCC banks is being aided by a number of factors. Businesses are being encouraged to apply for greater loans due to economic diversification, infrastructural investment, corporate development, and financing demand across key Gulf nations.
As interest rates decline, banks are likewise focusing more on loan volumes and fee-generating operations. Now that the repricing cycle is mostly over, lenders are aiming more and more to increase business volumes in order to boost revenue growth.
Corporate Borrowers Grow in Significance
The increasing role of corporate borrowers is one of the most obvious shifts.
June saw a 6.8% year-over-year increase in private-sector credit in Saudi Arabia, but as retail mortgage expansion slowed, lending growth switched to corporate clients. During the second quarter, gross lending by Saudi-listed banks rose by 1.6% to $876.1 billion.
According to Al Rajhi Capital, Saudi banks that catered to business clients had 10% annual loan growth, while those that catered to retail clients saw 4% increase.
Leading the regional momentum are Saudi Arabia and Oman.
Saudi Arabia continues to play a significant role in the expansion of GCC loans. Demand for funding is being generated by the Kingdom’s economic transition and ongoing investments in housing, tourism, infrastructure, and other areas.
Strong momentum was also noted in Oman. Omani bank loans had the second-fastest quarterly growth rate among GCC markets, rising 4.1% to $88.2 billion in the second quarter.
Increased economic activity and rising finance demand have also helped Oman’s banking industry.
UAE Banks Show Significant Growth
For the second consecutive quarter, the regional expansion was dominated by banks listed in the United Arab Emirates. Their gross loans reached $816.5 billion, a 4.5% rise. Emirates NBD’s purchase of a controlling share in India’s RBL Bank contributed to the growth.
Arabic Statement on GCC Banking Growth
“يعكس نمو الإقراض المصرفي في دول مجلس التعاون الخليجي قوة الطلب على التمويل واستمرار النشاط الاقتصادي، مع تحول متزايد نحو تمويل الشركات والمشاريع الاستراتيجية.”
This expansion demonstrates how banks are continuing to assist companies and economic growth while modifying their lending practices in response to shifting market conditions.
What Does the Amount of $2.59 Trillion Mean?
The magnitude of financial activity throughout the Gulf is demonstrated by the record lending level. While Islamic banks reported funding growth of 3.3% as opposed to 2.4% for conventional bankers, net loans also rose 2.7% to $2.51 trillion.
Although deposit growth was slower than lending growth, customer deposits at listed GCC banks increased 1.7% to a record $2.92 trillion at the same time.
GCC Banks’ Prospects
It is anticipated that interest rate circumstances, corporate investment, and economic diversification will continue to have a significant impact on the lending environment. S&P Global Ratings projects that GCC bank lending would expand by 5% to 6% on average in 2026, with Saudi Arabia and the United Arab Emirates expected to see faster growth.
“تواصل البنوك الخليجية لعب دور رئيسي في تمويل التنويع الاقتصادي والمشاريع الكبرى، مع زيادة أهمية الإقراض المؤسسي وتنويع مصادر الدخل.”
GCC banks continue to be essential to the region’s economic growth, as seen by the record $2.59 trillion in gross lending. The Gulf banking industry is about to enter a phase when lending strategy and economic diversification will continue to be important performance drivers as lenders shift away from rate-driven growth and toward corporate financing, business volumes, and fee income.
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