UAE Banks Surpass GCC Peers in Profitability and Growth
The UAE's banking sector has benefitted from a strong economic outlook, despite the volatile geopolitical landscape. As oil prices fluctuate and global tensions persist, the UAE has managed to shield its financial institutions from significant risks. The country’s economic policies, aimed at boosting diversification, have also contributed to a robust growth trajectory for local banks.
Among the banks identified in the report, Abu Dhabi Commercial Bank emerges as a top pick for investors, particularly due to its attractive valuation and promising growth potential. CI Capital noted that ADCB’s strong fundamentals, coupled with its ability to adapt to changing market conditions, make it a solid contender for long-term growth. With a high growth profile and appealing valuation metrics, ADCB is well-positioned to capitalise on the UAE’s favourable economic conditions.
Close behind ADCB is First Abu Dhabi Bank, recognised for its solid banking indicators. FAB, the largest bank in the UAE, continues to maintain a stable and reliable financial position. CI Capital’s analysis suggests that FAB’s ability to balance risk and reward, while maintaining a steady growth trajectory, puts it in a prime position to continue leading the market. Its wide range of banking services, from retail to corporate, has given it a solid footing in both local and regional markets.
Emirates NBD, another key player in the UAE banking sector, is highlighted for its strong valuation. Despite challenges in the broader regional economy, ENBD has managed to maintain its profitability levels and effectively leverage its market position. CI Capital’s report pointed to ENBD’s competitive valuation as one of its key strengths, offering significant upside potential for investors looking for long-term growth. The bank's diversification strategies, including a strong focus on digital banking, have enabled it to stay ahead of competitors in an increasingly technology-driven market.
The UAE banking sector’s profitability remains one of the most attractive in the GCC. According to the report, UAE banks are expected to outperform their regional peers in terms of return on equity, with a projected 2025 ROE that exceeds GCC peers by 5.8 percentage points. This significant margin indicates a robust capacity for generating returns on invested capital, reinforcing the stability and resilience of UAE financial institutions.
This growth is driven by a combination of factors, including effective regulatory frameworks, the resilience of the non-oil sectors, and a strong domestic market. With economic diversification and a focus on sustainable finance, the UAE banking sector is well-positioned to thrive even in the face of global economic uncertainties.
In particular, UAE banks are benefitting from rising demand for digital and mobile banking services, which have become a priority as the region’s banking customers increasingly turn to online platforms for their financial needs. This shift has prompted banks like ADCB, FAB, and ENBD to accelerate their digital transformation, investing in technology to enhance customer experiences and optimise operational efficiency.
While the global banking sector faces pressures from rising inflation and tightening monetary policies, the UAE’s well-capitalised banks remain insulated due to the country’s strong economic fundamentals. The UAE government’s fiscal discipline, coupled with its pro-business environment, has created an optimal setting for banking growth and profitability. As the nation continues to strengthen its position as a global financial hub, UAE banks are set to remain among the most profitable and resilient institutions in the region.
The stability of the banking sector is further supported by the country’s comprehensive risk management frameworks and robust capital buffers. UAE banks are generally well-capitalised, which provides a safeguard against potential economic shocks. Their ability to maintain healthy liquidity ratios and diversify their risk profiles has allowed them to weather global challenges effectively.
Join the conversation