UAE Banks Outperform GCC Peers Despite Geopolitical Headwinds

The UAE banks outperformed their GCC peers, supported by a positive macroeconomic environment and the economy’s resilience to recent geopolitical headwinds, CI Capital said in a new report.

The brokerage named Abu Dhabi Commercial Bank (ADCB) as its top pick for its cheap valuation and high growth profile.

First Abu Dhabi Bank (FAB) ranked next on its solid banking indicators, while Emirates NBD (ENBD) stood out on valuation.

The UAE banks’ profitability remains solid, with 2025 return on equity outpacing GCC peers by 5.8 percentage points (pp).

Stronger-than-expected loan performance in the first half of 2025 (+9.5% year-to-date, on average, for the banks under its coverage) paves the way for growth in the mid-high teens for the year.

“We flag Abu Dhabi Islamic Bank (ADIB) and Dubai Islamic Bank (DIB) as outperformers on loan growth for 2025 (+19% and +16%, respectively), driven by the former’s strong retail offering and the latter’s healthy retail home finance franchise and diversified corporate loan pipeline,” the brokerage said.

While CI Capital expects margin pressure in the second half of the year amid further rate cuts, return on equity (RoE) is anticipated to stay healthy at an average of 19.7% in 2025.

UAE banks’ ample liquidity (average loan-to-deposit ratio at 80.3% as of June 2025, 22 pp below Saudi peers’ average) positions them to benefit from Saudi Arabia’s higher growth potential via cross-border lending.

The brokerage has upgraded target prices across its UAE banks coverage.

ADCB, FAB and ENBD were rated overweight, with target prices (TP) of AED 19.5, AED 22 and AED 32 per share, respectively.

ADIB and DIB have neutral ratings with target prices of AED 23.5 and AED 10.5 per share.