Bahrain-Listed Firms Report Modest Profit Growth in Q2

Bahrain-listed companies recorded a marginal increase in collective net profits for the second quarter of 2025, reaching a total of $567.1 million, a 0.5 per cent rise from the same period last year.

According to a report by Kamco Invest, the positive result was driven by strong performances in the banking and insurance sectors, which led growth across ten of the 14 sectors listed on the Bahrain Bourse.

The first half of the year showed even stronger results, with total earnings for the broader market climbing 6.9pc year-on-year to $1.13 billion, up from $1.06bn in the first half of 2024.

This reflected a resilient performance across several key industries despite some market headwinds.

The banking sector was the primary driver of quarterly growth. Its net profits advanced 13.5pc year-on-year in Q2 to reach $280.4m, a significant jump from $247m a year earlier.

For the first half of 2025, banking sector earnings surged by 25.3pc, hitting $668.9m.

Leading this strong performance were key players like Al Salam Bank, which saw its Q2 net profits soar by 31.3pc to $49.8m, driven by robust core banking activities.

National Bank of Bahrain (NBB) also posted a solid 1.5pc rise in net profits to $51.4m, supported by diversified revenue streams and a 45pc growth in fee-based income.

Meanwhile, Bank ABC recorded a marginal profit increase, backed by higher net interest income and lower provisions.

The insurance sector delivered an even more dramatic result, with its net profits surging more than sixfold to $95.8m in Q2, compared with just $15.7m in Q2 of the previous year.

This substantial increase was largely attributed to Bahrain National Holding, which reported Q2 net earnings of $79m, up from $2.83m last year, primarily due to the sale of two subsidiaries.

Not all sectors performed as well. The materials sector, represented solely by Alba, experienced a 64.2pc year-on-year decline in net profit, which fell to $65.1m.

This was primarily due to elevated raw material costs, particularly for alumina. Despite this pressure, Alba managed to maintain stable revenue and strong value-added sales.

The telecom sector also saw profits decline by 6.4pc to $49.1m, reflecting softer earnings for the industry during the quarter.

Zooming out, aggregate net profits for companies listed on GCC exchanges fell sharply in the second quarter of 2025, pressured by a steep decline in crude oil prices and softer petrochemical prices.

Combined earnings dropped 8.7pc year-on-year to $56.7bn, down from $62.1bn in the same quarter last year.

This marks a 3.4pc sequential decline from the first quarter.

The drop was led by major profit declines in the energy and basic materials sectors, which more than offset gains in other industries.

A majority of sectors, including food and beverage, real estate, utilities, and telecommunications, reported healthy double-digit growth.

Regionally, profitability was mixed. Saudi Arabia registered the largest absolute decline, with profits falling by $6.3bn to $33.04bn.

Kuwait saw a profit drop of more than 25pc to $1.65bn, primarily due to discontinued operations at logistics firm Agility. Dubai-listed companies also experienced a 5.7pc year-on-year profit decrease to $6.5bn.

In contrast, four GCC countries reported profit growth. Abu Dhabi led the gains with a $1.6bn increase, bringing its total to $10.3bn. Oman and Qatar also showed strong growth.

The energy sector was the main drag on performance. Aggregate profits for the sector declined by 18pc year-on-year to $25.5bn.

This coincided with a 19.6pc drop in the average price of Brent crude oil to $68.1 per barrel during the quarter, driven by Opec output announcements and talks between the US, Russia, and Iran.

Saudi Aramco’s net profits fell by 19.4pc, a key contributor to the overall decline. The state-owned oil giant was hit by lower crude oil prices, as well as reduced prices for refined and chemical products.

Defying the trend, the region’s listed banks reported a strong double-digit profit growth of 10.3pc, reaching a new record high of $16.6bn in Q2.

The sector’s profits were boosted by a 6.9pc increase in net interest income and a more than 25pc rise in non-interest income, which offset a 41.6pc jump in impairment charges.

Six of the seven GCC countries saw profit growth in their banking sectors.

Dubai was the only exception, where banking profits declined by 6.4pc, mainly due to higher non-interest expenses and impairments booked by Emirates NBD and Mashreq Bank.

For the first half of 2025, GCC-listed companies’ aggregate net profits saw a smaller year-on-year decline of 3.4pc to $115.4bn.

This was primarily due to falling profits in Saudi Arabia and Kuwait, while the remaining countries saw an increase.