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RIYADH: Strong regional fundamentals and a robust project pipeline drove Gulf Cooperation Council-listed banks’ net profit to a record $16.2 billion in the second quarter of 2025, up 9.2 percent year on year. 

This marks the second consecutive quarterly increase, with profits rising 3.7 percent quarter on quarter, supported by broad-based revenue growth and a lower cost-to-income ratio, which offset higher impairments, according to Kuwait-based Kamco Invest’s GCC Banking Sector Report – Q2 2025.

This comes as GCC inflation remained stable in the second quarter despite heightened geopolitical risks. 

The report aligns with forecasts that regional economies will grow 4.4 percent in 2025, up from 4 percent, as rising oil output and resilient non-oil activity offset global trade headwinds, according to a recent report by the Institute of Chartered Accountants in England and Wales with Oxford Economics. 

“At the country level, the q-o-q growth remained largely positive with five out of six country aggregates showing a sequential growth in net income while the aggregate for the Bahraini banking sector showed a decline,” said the Kamco report.

“Kuwaiti-listed banks showed the biggest absolute growth in net profits with an increase of $204.6 million, or 15.6 percent, mainly led by reversal of provisions reported by three out of nine listed banks on the exchange,” it added. 

“UAE and Saudi banks were next with net profit growth of $191.8 million (+3.2 percent) and $152.3 million (+2.6 percent), respectively,” Kamco said. 

Year-on-year, all markets posted growth, with Saudi and Bahraini banks achieving double-digit increases, while Oman and Kuwait also reported solid gains. 

It showed that the banking sector’s total revenues hit a new all-time high of $35.6 billion for the quarter, driven by a solid 3.6 percent quarter-on-quarter increase. 

“The growth was led by a broad-based increase in revenues reported by banks across country aggregates that more than offset an 8.2 percent decline reported by Bahraini banks,” the report said. 

“UAE-listed banks led the way during the quarter with a revenue growth of 5.3 percent or $674.0 million during Q2-2025 as compared to Q1-2025,” it also said. 

Lending rose 3.4 percent quarter on quarter, the second-largest gain in 16 quarters, bringing total gross loans to $2.23 trillion, supported by strong non-oil sector activity, particularly manufacturing, which grew well above regional benchmarks. 

Central bank data confirmed the strength of GCC economies, showing sustained credit expansion in all countries except Bahrain, even amid declining project awards. 

Customer deposits reached a new high of $2.74 trillion, up 3.5 percent quarter on quarter and 13.3 percent year on year, with growth broad-based across all GCC countries. 

Loan-to-deposit ratio 

The overall loan-to-deposit ratio for GCC banks remained above the 80 percent threshold at the end of the period, settling at 81.5 percent, slightly down from 81.6 percent in the first quarter. 

This is the fifth consecutive quarter the ratio has stayed above 80 percent, reflecting stronger asset utilization and improved margins, which help offset the impact of declining interest rates. 

RIYADH: Egypt has unveiled a sweeping initiative that places the private sector at the center of future growth, with Prime Minister Mostafa Madbouly vowing to cut debt to the lowest level in the country’s history and sustain export expansion. 

The National Narrative for Economic Development, launched in the New Administrative Capital and attended by cabinet members, lawmakers, diplomats, and business leaders, has a blueprint that integrates the government’s reform agenda with Egypt Vision 2030. 

It will undergo two months of consultation with experts and the public, with the final version due in December. 

“The narrative is based on a fundamental principle that we affirm with utmost clarity, which is that the private sector will lead economic development in Egypt, and strongly, in the coming period,” Madbouly said in his opening speech. 

He added that the government aims to reduce debt levels to “the lowest level Egypt has ever seen in its history.” 

The prime minister said gross domestic product expanded 4.2 percent in the first nine months of the current fiscal year, compared to 2.4 percent in the same period last year, supported by industry, tourism, agriculture, and information and communication technology. 

Inflation fell from 25.7 percent in July 2024 to 13.9 percent a year later, while remittances exceeded $36.5 billion and unemployment dropped to its lowest in four years. 

Exports are expected to grow by 20 percent this year, and Madbouly said the government aims to sustain that pace for five years, building on infrastructure investments in ports, roads, and utilities. He cited the Suez Canal Economic Zone as a case where government spending has unlocked major foreign investment. 

Investment and Foreign Trade Minister Hassan El-Khatib said the national arrative incorporates the Foreign Direct Investment Strategy 2025–2030, a roadmap to expand Egypt’s investor base and attract high-quality capital into priority sectors. 

It targets 13 sectors, eight ready for immediate promotion and five requiring additional reforms, and was developed with the General Authority for Investment and Free Zones, the Planning and International Cooperation ministries, the World Bank Group, and private sector input. 

El-Khatib highlighted a new unified licensing platform linking 41 government entities, offering 389 electronic services and e-payment options for 250 of them. 

The ministry is preparing for Egypt’s participation in the World Bank’s Business Ready report by translating nearly 2,000 survey questions and drafting a reform matrix in consultation with businesses. 

Planning and Economic Development Minister Rania Al-Mashat said the narrative seeks to redefine the state’s role, shifting from operator to regulator, enabler, and investment partner. 

She said implementation will be guided by the State Ownership Policy Document, coordinated through three entities — the State-Owned Companies Unit under the Cabinet, Egypt’s sovereign wealth fund, and the Government Offerings Unit. 

As part of this effort, 59 of 63 economic entities are under review for restructuring, including possible mergers or liquidation, to improve efficiency and rationalize spending. 

Al-Mashat added that a new state ownership policy index will track progress and measure the impact of reforms on investment and private sector growth. 

Madbouly said the ultimate aim of the reforms is to raise Egyptians’ quality of life and deliver economic indicators. 

“Ultimately, these reforms must have a positive impact on the well-being of Egyptian citizens in the near future, and that is our goal through this vision,” he said. 

“Consequently, we are working to reduce the state’s role in economic activity, further empower the private sector in the development process, and measure this with clear quantitative figures and indicators to assess our success,” he added.