Qatar Banks See Biggest Revenue Growth in First Quarter of 2025: Kamco Invest

Qatari banks registered the biggest increase in revenues with a quarter-on-quarter (q-o-q) gain of 2.1% during the first quarter (Q1) of 2025, according to Kamco Invest, a regional economic think-tank.

Saudi Arabia and the UAE-listed banks had distinctly smaller growths of 1.6% and 0.6%, respectively, during the review period, Kamco Invest said in a report.

In terms of topline performance, aggregate banking sector revenues (in the Gulf Co-operation Council) reached a new record high during the quarter at $34.6bn, although the growth was the smallest in four quarters at 0.04%.

The flattish growth was led by a decline in revenues reported by banks in Kuwait and Oman that almost fully offset the increase in revenues registered in other GCC countries, said the report.

Kamco Invest said after showing a marginal decline in the previous quarter, the first decline in seven quarters, banking credit facilities in Qatar bounced back and showed the biggest quarterly growth in nine quarters during Q1-2025 at 3%.

The increase was led by a strong growth in lending to public sector at 7.9% followed by a similar increase in lending to contractors. Lending to general trade and real estate increased by 1.5%; followed by 0.8% increase in lending to services. On the other hand, lending to industry, consumption and other sectors showed q-o-q declines.

Aggregate lending by listed banks in the GCC continued to show q-o-q growth during Q1-2025, backed by growth in all GCC markets, barring Kuwait that registered a marginal decline during the quarter.

Aggregate gross loans at the GCC level reached a new record high of $2.25tn, recording the highest q-o-q growth in 15 quarters at 3.6% in Q1-2025 vs 2.4% during the previous quarter.

Banks in Saudi Arabia reported the biggest q-o-q growth in gross loan in the GCC during Q1-2025 mainly led by healthy lending in almost all sectors. Gross loans growth for Saudi-listed banks came in at 5.5% or $41.9bn to $801.5nbn during Q1-2025.

The UAE and Qatari banks were next with lending growth of $20.1bn (+3.2% q-o-q) and $14.4bn (+3.6% q-o-q), respectively; while lenders in Oman and Bahrain registered marginal increase.

Total customer deposits reported by listed GCC banks reached a new record high level at the end of Q1-2025 at $2.65tn, registering a q-o-q growth of 5.1%.

At the country level, the UAE-listed banks registered the strongest growth in deposits during the quarter that reached $903.8bn after a q-o-q growth of 6.7%.

Qatari banks were next with a q-o-q growth of 6.1% to reach total customer deposits of $438.9bn followed by banks in Saudi Arabia with a growth of 4.8%. Banks in Bahrain, Oman and Kuwait, reported slightly smaller customer deposit growth during the quarter.

The aggregate loan-to-deposit ratio for the GCC banking sector remained elevated above the 80% mark at the end of Q1-2025. However, the ratio declined sequentially to reach 81.6% when compared to 82.4% in Q4-2024.

The ratio has remained consistently above the 80% mark over the last four quarters and reflects improving asset utilisation as well as better margins to offset pressure from lowering interest rates.

At the country level, banks in Saudi Arabia reported one of the highest levels of the loan-to-deposit ratio that reached 95.5% during the quarter, registering a growth of 70 basis points compared to Q4-2024.

Qatari banks registered a "sizeable" decline of 210 basis points with the ratio going below the 90% mark at 89.6%, it said.