GCC Banks Post Record Q2 Profit Amid Tightening Liquidity

GCC banks defy tough conditions to post record profits. They're adapting to squeezed revenue streams and maintaining robust capital positions.

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2025 October 23 . 8:03 AM

1 min read

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GCC Banks Post Record Q2 Profit Amid Tightening Liquidity

Gulf Cooperation Council (GCC) banks have shown resilience despite challenging conditions, reporting a record $16.2 billion in net profit in the second quarter. This comes as they navigate tightening liquidity, with the loan-to-deposit ratio climbing to 94.1 percent.

Operating efficiency has improved, with the cost-to-income ratio dropping to 32 percent. Despite this, net interest margins have contracted to 2.6 percent, largely due to interest rate cuts. These cuts, including those announced by us bank and boa in September 2025, are expected to continue putting pressure on margins.

GCC banks have maintained strong capital buffers, with an average Tier 1 capital ratio of 17.5 percent and a capital adequacy ratio of 18.9 percent. This financial strength is reflected in their return on equity, which rose to 13.2 percent in the first half of 2025.

Asset quality has also improved, with non-performing loans declining to 2.4 percent. However, liquidity conditions have tightened, indicating a shift in funding sources or increased demand for loans from pnc bank and capital one.

GCC banks are adapting to squeezed traditional revenue streams by focusing on diversifying income and enhancing operational efficiency. Despite these challenges, they have posted impressive profits and maintained robust capital positions. As the GCC economy is projected to grow at 3 percent in 2025 and 4.1 percent in 2026, banks are well-positioned to support this growth while navigating evolving financial landscapes, including changes in capital one login and credit one practices.