Gulf banks’ aggregate income from lending rose to a record during the second quarter of the year on the back of high interest rates.

Net interest income reported by lenders listed in the GCC reached $21.5 billion during the quarter, up by 7.6% from a year earlier and 0.91% from the previous quarter, according to Kamco Invest on Tuesday.

“Since central bank interest rates in the GCC remained unchanged during the quarter, net interest income reached a new peak,” the report said, adding that the quarter also recorded one of the highest quarterly total interest incomes, which hit $52.2 billion.

Quarterly net interest income growth

Banks in Kuwait led the growth, with net interest income rising by 6.3% to $2.5 billion during the quarter.

Listed banks in Saudi Arabia came second, recording a growth of 2.5% to $7.3 billion, followed by banks in Oman and UAE, reporting a growth of 2.3% and 1.5%, respectively.

However, banks in Qatar saw a sharp decline in net interest income, which reached $3.3 billion, down by 4.3% from the first quarter of 2024.

S&P Global Ratings had earlier forecast GCC banks’ earnings to remain strong this year, thanks to the delay in interest rate cuts.

The ratings agency also said that banks’ asset quality will remain resilient despite the higher-for-longer rates, thanks to supportive economies, contained leverage and a high level of precautionary reserves.

GCC banks’ aggregate net profit for the quarter reached $14.8 billion, up by 9.2% from the previous year, mainly supported by a steep decline in quarterly impairments.

(Writing by Cleofe Maceda; editing by Seban Scaria) seban.scaria@lseg.com