In the second quarter of 2025, the UAE banking industry reported significant loan growth, stable profitability, and enhanced efficiency, demonstrating the nation’s strong economic momentum and persistent investor confidence.
According to the most recent UAE Banking Pulse by Alvarez & Marsal (A&M), the country’s leading lenders had yet another excellent quarter, solidifying the UAE’s standing as the most reliable and lucrative banking system in the area. As corporates and consumers showed increasing confidence in the economy, lending activity intensified, with net loans and advances increasing 5% quarterly, surpassing deposit growth of 2.8%.
Economists view Lending growth as a clear indication of the UAE’s robust economic foundation. Increased bank lending indicates optimism among people eager to spend and companies preparing to grow, two major forces behind economic prosperity. Economic activity is fueled by lending expansion. The increase in loan demand demonstrates that the UAE economy is not just steady but also growing confidently, according to analysts.
According to the report, operational income rose by 3.9%, and the cost-to-income ratio improved to 27.5%, one of the most efficient ratios in the world. The industry’s strong profitability and investor attraction were highlighted by the sector-wide return on equity, which increased to 18.9%.
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