A recent analysis by S&P Global Ratings suggests that banks in the UAE and Saudi Arabia are set to spearhead credit growth throughout the GCC in 2026. Driven by robust domestic demand, significant government infrastructure investment, and solid banking fundamentals, these two nations are projected to see lending growth in the high single digits, outperforming their regional peers. While broader economic growth may see a slight moderation, sustained activity in key sectors—bolstered by increased oil production and ongoing public projects—is expected to keep credit momentum steady in these markets.

From a structural perspective, GCC banking institutions remain in a position of strength, characterized by healthy capital levels and stable asset quality. With average non-performing loan ratios holding firm at 2.6 percent and substantial liquidity buffers in place, the sector is well-equipped to manage potential market turbulence. Furthermore, massive capital injections from regional governments have bolstered deposit growth and balance sheets. Although profitability may face minor pressure due to rising provisioning costs and tempered credit expansion, the UAE and Saudi banking sectors are anticipated to maintain their roles as the region's top performers, backed by strong operational efficiency and resilient financial foundations.