Coverage: Q3 2025 · Information to 24 December 2025
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TGB Quarterly Regional Banking Monitor · 24 December 2025
The Saudi Central Bank matched each of the Federal Reserve's three 25bp cuts between September and December 2025 and Egypt eased by 300bp in August and October, while the region's largest banks relied on loan growth to offset narrower margins and higher tax charges.
The desk view
From September 2025 the Gulf central banks followed the Federal Reserve's rate cuts, Kuwait only in part. The Federal Reserve cut on 17 September, 29 October and 10 December, and the Saudi Central Bank matched each move, taking its repo rate to 4.25%. Lending kept growing fast: Saudi bank credit rose 15.8% year on year in the second quarter against 7.7% for deposits, and UAE gross credit was up 14.7% in the year to September. Margins are narrowing at the large banks, with Emirates NBD's down 21bp and National Bank of Kuwait's down 24bp over the first nine months. Higher tax charges weigh on reported earnings: National Bank of Kuwait's pre-tax profit rose 11.3% but its net profit only 2.3%, after a new 15% domestic minimum top-up tax took effect. Egypt is the exception, with 625bp of cuts in 2025 and a pause in November after inflation picked up.
The regional picture
The Federal Reserve lowered the federal funds target range by 25bp at each of its meetings on 17 September, 29 October and 10 December 2025, to 3.50–3.75%. It said it would assess incoming data, the evolving outlook and the balance of risks before further adjustments.
In the Gulf, transmission was immediate. The Central Bank of the UAE cut its Base Rate from 4.40% to 4.15% on 17 September and from 3.90% to 3.65% on 10 December; the Base Rate is anchored to the Federal Reserve's interest rate on reserve balances. That is 75bp of easing since September. The Saudi Central Bank cut its repo rate by 25bp on each of the three dates, to 4.25%, and its reverse repo rate to 3.75%. The Central Bank of Bahrain cut its overnight deposit rate from 4.50% to 4.25% on 10 December. Kuwait moved less: its discount rate fell from 4.00% to 3.75% on 17 September and from 3.75% to 3.50% on 10 December, so the October cut was not matched. The Central Bank of Kuwait cited the need for policies tailored to each economy's circumstances.
Outside the Gulf, policy followed domestic inflation. The Central Bank of Egypt cut by 200bp on 28 August and 100bp on 2 October, then held on 20 November. Bank Al-Maghrib kept Morocco's key rate at 2.25% on 16 December.
Policy rates after the December 2025 decisions, %
Source: Board of Governors of the Federal Reserve System, Federal Reserve issues FOMC statement (10 December 2025), 10 December 2025; Saudi Central Bank (SAMA), SAMA Decision on Repo and Reverse Repo Rates (10 December 2025), 10 December 2025; Central Bank of the UAE (CBUAE), CBUAE Lowers the Base Rate by 25 Basis Points (10 December 2025), 10 December 2025; Central Bank of Kuwait (CBK), CBK Cuts the discount rate by 25 basis points to 3.50%, 10 December 2025; Central Bank of Bahrain (CBB), CBB Cuts Overnight Deposit Interest Rate by 25 basis points, 10 December 2025; Bank Al-Maghrib, Press release: Bank Al-Maghrib Board Meeting, Rabat, December 16, 2025, 16 December 2025.
Policy-rate decisions, September to December 2025
| Central bank | Rate | Moves | Level after last decision |
|---|---|---|---|
| Saudi Central Bank | Repo | Three 25bp cuts (September, October, December) | 4.25% |
| Central Bank of the UAE | Base Rate | 4.40% to 4.15% (September); 3.90% to 3.65% (December) | 3.65% |
| Central Bank of Kuwait | Discount rate | 4.00% to 3.75% (September); 3.75% to 3.50% (December) | 3.50% |
| Central Bank of Bahrain | Overnight deposit rate | 4.50% to 4.25% (December) | 4.25% |
| Central Bank of Egypt | Overnight deposit rate | Cut 100bp (October); held (November) | 21.00% |
| Bank Al-Maghrib | Key rate | Held (December) | 2.25% |
Source: Saudi Central Bank (SAMA), SAMA's Decision on Repo and Reverse Repo Rates (17 September 2025), 17 September 2025; Saudi Central Bank (SAMA), SAMA's Decision on Repo and Reverse Repo Rates (29 October 2025), 29 October 2025; Saudi Central Bank (SAMA), SAMA Decision on Repo and Reverse Repo Rates (10 December 2025), 10 December 2025; Central Bank of the UAE (CBUAE), CBUAE lowers the Base Rate by 25 basis points (17 September 2025, Arabic release), 17 September 2025; Central Bank of the UAE (CBUAE), CBUAE Lowers the Base Rate by 25 Basis Points (10 December 2025), 10 December 2025; Central Bank of Kuwait (CBK), CBK Cuts Discount Rate by 25 Basis Points to 3.75%, 17 September 2025; Central Bank of Kuwait (CBK), CBK Cuts the discount rate by 25 basis points to 3.50%, 10 December 2025; Central Bank of Bahrain (CBB), CBB Cuts Overnight Deposit Interest Rate by 25 basis points, 10 December 2025; Central Bank of Egypt (CBE), MPC Press Release - October 2, 2025, 2 October 2025; Central Bank of Egypt (CBE), MPC Press Release - November 20, 2025, 20 November 2025; Bank Al-Maghrib, Press release: Bank Al-Maghrib Board Meeting, Rabat, December 16, 2025, 16 December 2025.
Saudi Arabia: credit outruns deposits
The Saudi Central Bank's quarterly review of the second quarter shows credit outrunning deposits: bank credit rose 15.8% year on year to SAR3,186.3 billion, while total bank deposits rose 7.7% to SAR2,875.7 billion. Credit therefore exceeded deposits by SAR310.6 billion at the end of June. Public-sector credit grew fastest, at about 42.6%, and time and savings deposits rose about 21.7%, far faster than demand deposits. Real estate loans grew 14.5% to 29.3% of total bank credit, while consumer loans rose only 3.9%. The shift towards time deposits points to a rising cost of funds.
Saudi Arabia: bank credit and deposits, second quarter of 2025
| Item | SAR billion | Year-on-year change |
|---|---|---|
| Bank credit, private and public sectors | 3,186.3 | 15.8% |
| of which private sector | 2,959.4 | 14.1% |
| Real estate loans | 932.8 | 14.5% |
| Consumer loans | 469.8 | 3.9% |
| Total bank deposits | 2,875.7 | 7.7% |
| Time and savings deposits | 1,099.9 | 21.7% |
| Demand deposits | 1,495.3 | 5.2% |
Source: Saudi Central Bank (SAMA), Key Economic Developments, Second Quarter 2025, 5 October 2025.
Al Rajhi Bank shows the same pattern: financing grew 16% to SAR756 billion over the first nine months of 2025, against customer deposits of SAR670 billion. Financing was about 113% of customer deposits. In the third quarter the bank issued a USD1 billion Tier 2 Social Sukuk, its first Tier 2 issue in international debt markets. Net profit rose 30% to SAR18,417 million, with a return on equity of 23.5%.
United Arab Emirates: balance sheets accelerate
Gross bank assets rose 2.2% in September 2025 alone, to AED5,199.9 billion, and gross credit 2.5% to AED2,478.8 billion. Lending to government-related entities rose 7.2% in the month and to the private sector 1.5%. Deposits rose 1.8% to AED3,186.0 billion, helped by a 14.5% jump in non-resident deposits. Against September 2024, gross credit was up 14.7% and deposits 15.4%. Unlike Saudi Arabia, UAE deposits are keeping pace with credit.
The capital adequacy ratio was 17.3% in June 2025, against 18.3% a year earlier, and remained well above the 13.0% minimum. The CET1 ratio fell to 14.6% from 15.3% over the same period. The capital adequacy ratio was therefore 1.0 percentage point lower than a year earlier.
UAE banking indicators, AED billion unless stated
| Indicator | September 2024 | June 2025 | September 2025 |
|---|---|---|---|
| Total assets | 4,401.7 | 4,973.3 | 5,199.9 |
| Gross credit | 2,161.9 | 2,334.3 | 2,478.8 |
| Total deposits | 2,761.4 | 3,045.8 | 3,186.0 |
| Capital adequacy ratio | Not covered | 17.3% | Not published by cutoff |
Source: Central Bank of the UAE (CBUAE), Quarterly Monetary, Banking & Financial Markets Developments Report, 2024 - 3rd Quarter, 30 November 2024; Central Bank of the UAE (CBUAE), Quarterly Monetary, Banking & Financial Markets Developments Report, 2025 - 2nd Quarter, 31 August 2025; Central Bank of the UAE (CBUAE), Summary Report: Monetary & Banking Developments - September 2025, 20 November 2025.
Emirates NBD's lending rose by AED99 billion, or 19%, in the first nine months, and the bank said loan growth more than offset the impact of rate cuts. Its net interest margin was 3.43%, 21bp lower than a year earlier. On 18 October it agreed to buy 60% of India's RBL Bank for USD3.0 billion. At First Abu Dhabi Bank, the margin fell 9bp to 1.84% on lower benchmark rates, and a 37% rise in non-interest income carried revenue growth.
Kuwait: the tax effect
National Bank of Kuwait's operating profit before tax rose 11.3% to KD592.5 million in the first nine months of 2025, but net profit rose only 2.3% to KD467.4 million. The bank attributed the gap to the 15% Domestic Minimum Top-up Tax in force from 1 January 2025, which lifted its effective tax rate to 15.9% from 8.7%. Its net interest margin fell 24bp to 2.45%, as lower benchmark rates and an unfavourable asset mix reduced yields faster than funding costs. Loans grew 12.5% to KD26.1 billion, the NPL ratio was 1.37% and total capital adequacy 16.4%. Following the passage of Kuwait's Debt Law, the Central Bank of Kuwait has issued KD2.0 billion of government treasury bonds since June 2025; National Bank of Kuwait said it was cautiously hopeful that continued issuance would let it deploy dinar liquidity more profitably.
Selected large banks, first nine months of 2025
| Bank | Net profit | Change | Net interest margin | NPL ratio | CET1 ratio |
|---|---|---|---|---|---|
| Al Rajhi Bank | SAR18,417 million | +30% | Not disclosed | Not disclosed (coverage above 150%) | Not disclosed |
| Emirates NBD | AED19.0 billion | 0% | 3.43% | 2.5% | 14.7% |
| First Abu Dhabi Bank | AED16.02 billion | +24% | 1.84% | 2.6% | 13.7% |
| National Bank of Kuwait | KD467.4 million | +2.3% | 2.45% | 1.37% | 12.4% |
Source: Al Rajhi Bank, Alrajhi bank's Net Profit rises by 30% to reach SAR 18,417 million for the first nine months of 2025, 20 October 2025; Emirates NBD, Emirates NBD Q3 2025 results press release, 23 October 2025; First Abu Dhabi Bank (FAB), Management Discussion & Analysis for the nine-month period ended 30 September 2025, 22 October 2025; National Bank of Kuwait (NBK), filed on Boursa Kuwait, 3Q/9M 2025 National Bank of Kuwait Earnings Call (edited transcript), 26 October 2025.
Pre-tax and net profit growth, first nine months of 2025
| Bank | Pre-tax profit growth | Net profit growth | Tax line |
|---|---|---|---|
| Emirates NBD | +6% | 0% | Tax up 41% to AED4.4 billion |
| First Abu Dhabi Bank | +26% | +24% | Taxes and non-controlling interests up 34% |
| National Bank of Kuwait | +11.3% | +2.3% | Effective tax rate 15.9%, from 8.7% |
Source: Emirates NBD, Emirates NBD Q3 2025 results press release, 23 October 2025; First Abu Dhabi Bank (FAB), Management Discussion & Analysis for the nine-month period ended 30 September 2025, 22 October 2025; National Bank of Kuwait (NBK), filed on Boursa Kuwait, 3Q/9M 2025 National Bank of Kuwait Earnings Call (edited transcript), 26 October 2025.
The pattern holds at Emirates NBD and First Abu Dhabi Bank. Emirates NBD's pre-tax profit rose 6% to AED23.4 billion while its profit was unchanged at AED19.0 billion, as its tax charge rose 41% to AED4.4 billion. First Abu Dhabi Bank said its profit absorbed a step-up in corporate tax; taxes and non-controlling interests rose 34%, keeping net profit growth at 24% against 26% before tax. For 2025, pre-tax growth is the better guide to operating performance, since the tax step-up is a change in level.
Egypt: high rates, falling slowly
The Central Bank of Egypt cut its overnight deposit rate by 200bp to 22.00% on 28 August and by 100bp to 21.00% on 2 October, bringing cuts in 2025 to 625bp. On 20 November it held, after headline inflation rose to 12.5% in October from 11.7% in September. The real policy rate was about 8.5 percentage points. The Committee said it favoured a wait-and-see approach, with a target of 7% (±2 percentage points) on average in the fourth quarter of 2026. Real GDP growth was an estimated 5.2% in the third quarter, and real growth of local-currency lending to the private sector averaged 14.5%. The banking system's net foreign assets rose to USD17.9 billion in August from USD15.0 billion in June.
Banks passed cuts to depositors faster than to borrowers. The average rate on new deposits fell to 17.3% in the third quarter from 21.0% in the first, while the rate on new loans fell only to 24.5% from 26.6%. Measured against the overnight interbank rate, the central bank put the transmission ratio at about 0.95x for new deposit rates and 0.5x for new lending rates. The lending-deposit spread therefore widened, which supports margins early in the easing cycle.
Egypt: new deposit and lending rates
| Rate | First quarter of 2025 | Third quarter of 2025 |
|---|---|---|
| Weighted average rate on new deposits | 21.0% | 17.3% |
| Weighted average rate on new loans | 26.6% | 24.5% |
| Spread, percentage points | 5.6 | 7.2 |
| Overnight interbank rate (average) | 27.5% | 23.6% |
Source: Central Bank of Egypt (CBE), Monetary Policy Report Q3 2025, 30 October 2025.
The central bank's Financial Stability Report, covering data to March 2025, shows the sector entering the easing cycle from strength. The non-performing loan ratio was 2.2% in March 2025, down from 2.9% in FY2023, and the capital adequacy ratio 18.3% against a 12.5% minimum. Deposits grew 25.3% in the year to March 2025, and the loan-to-deposit ratio rose to 63.6% from 59.9%. Return on average equity rose to 39% in FY2024, and the net interest margin widened to 5.8% from 5.2%.
Egypt: banking-sector soundness indicators
| Indicator | Value | Reference date |
|---|---|---|
| Capital adequacy ratio | 18.3% (minimum 12.5%) | March 2025 |
| Non-performing loan ratio | 2.2% | March 2025 |
| Provision coverage | 87.2% | March 2025 |
| Liquidity ratio, local currency | 37.1% (minimum 20%) | March 2025 |
| Loan-to-deposit ratio | 63.6% | March 2025 |
| Return on average assets | 2.6% | FY2024 |
Source: Central Bank of Egypt (CBE), Central Bank of Egypt Publishes the Financial Stability Report - March 2025, 4 November 2025; Central Bank of Egypt (CBE), Financial Stability Report - March 2025, 4 November 2025.
Morocco: slow pass-through
Bank Al-Maghrib judged its 2.25% key rate appropriate in December, with inflation averaging 0.8% over the first ten months of 2025. Bank lending rates to the non-financial sector had fallen by a cumulative 58bp since June 2024, against 75bp of key-rate cuts. That left 17bp not yet passed through by the third quarter of 2025. Bank Al-Maghrib projects growth in bank credit to the non-financial sector of 4.1% in 2025 and 5% in 2026.
Cross-country comparison
MENA banking monitor: policy rates and system indicators
| Country | Policy rate | Credit growth | Deposit growth | Capital |
|---|---|---|---|---|
| Saudi Arabia | Repo 4.25% | 15.8% (Q2 2025) | 7.7% (Q2 2025) | Not covered |
| UAE | Base Rate 3.65% | 14.7% (September 2025) | 15.4% (September 2025) | CAR 17.3% (June 2025) |
| Kuwait | Discount rate 3.50% | Largest bank's loans 12.5% | Not covered | Largest bank's CAR 16.4% |
| Egypt | Overnight deposit rate 21.00% | Real private credit 14.5% (Q3 2025) | 25.3% (March 2025) | CAR 18.3% (March 2025) |
| Morocco | Key rate 2.25% | Projected 4.1% for 2025 | Not covered | Not covered |
Source: Saudi Central Bank (SAMA), SAMA Decision on Repo and Reverse Repo Rates (10 December 2025), 10 December 2025; Saudi Central Bank (SAMA), Key Economic Developments, Second Quarter 2025, 5 October 2025; Central Bank of the UAE (CBUAE), CBUAE Lowers the Base Rate by 25 Basis Points (10 December 2025), 10 December 2025; Central Bank of the UAE (CBUAE), Summary Report: Monetary & Banking Developments - September 2025, 20 November 2025; Central Bank of the UAE (CBUAE), Quarterly Monetary, Banking & Financial Markets Developments Report, 2024 - 3rd Quarter, 30 November 2024; Central Bank of the UAE (CBUAE), Quarterly Monetary, Banking & Financial Markets Developments Report, 2025 - 2nd Quarter, 31 August 2025; Central Bank of Kuwait (CBK), CBK Cuts the discount rate by 25 basis points to 3.50%, 10 December 2025; National Bank of Kuwait (NBK), filed on Boursa Kuwait, 3Q/9M 2025 National Bank of Kuwait Earnings Call (edited transcript), 26 October 2025; Central Bank of Egypt (CBE), MPC Press Release - November 20, 2025, 20 November 2025; Central Bank of Egypt (CBE), Monetary Policy Report Q3 2025, 30 October 2025; Central Bank of Egypt (CBE), Central Bank of Egypt Publishes the Financial Stability Report - March 2025, 4 November 2025; Bank Al-Maghrib, Press release: Bank Al-Maghrib Board Meeting, Rabat, December 16, 2025, 16 December 2025.
Credit is growing in double digits in Saudi Arabia and the UAE, but only in Saudi Arabia did it far exceed deposit growth, by 8.1 percentage points. Margins at the large Gulf banks narrowed by between 9bp and 24bp, a cost that loan growth and fee income have so far absorbed. Egypt's banks combine a 2.2% NPL ratio with an 18.3% capital ratio, which leaves room to absorb a slower disinflation path.
Outlook and risks
The UAE Base Rate is anchored to the Federal Reserve's rate on reserve balances, and the Federal Reserve has made further moves conditional on incoming data. In Egypt, the central bank expects inflation to inch up towards the end of 2025 as energy price increases feed through, before declining in the second half of 2026. Higher tax charges kept net profit growth below pre-tax growth at Emirates NBD, First Abu Dhabi Bank and National Bank of Kuwait in the first nine months, and National Bank of Kuwait expects its effective tax charge for 2025 to be 16% to 17% of pre-tax profit.
What to watch
- End of the second quarter of 2026: expected completion of Emirates NBD's acquisition of a 60% stake in RBL Bank, subject to regulatory approvals.
- 17 March 2026: Bank Al-Maghrib's first scheduled board meeting of 2026.
- Late 2025: the Central Bank of Egypt's projected uptick in headline inflation as energy price increases take effect.
Primary sources: Central Bank of Egypt (CBE), MPC Press Release - November 20, 2025, 20 November 2025; Central Bank of Egypt (CBE), Monetary Policy Report Q3 2025, 30 October 2025; Board of Governors of the Federal Reserve System, Federal Reserve issues FOMC statement (17 September 2025), 17 September 2025; Board of Governors of the Federal Reserve System, Federal Reserve issues FOMC statement (29 October 2025), 29 October 2025; Board of Governors of the Federal Reserve System, Federal Reserve issues FOMC statement (10 December 2025), 10 December 2025; Saudi Central Bank (SAMA), SAMA's Decision on Repo and Reverse Repo Rates (17 September 2025), 17 September 2025; Saudi Central Bank (SAMA), SAMA's Decision on Repo and Reverse Repo Rates (29 October 2025), 29 October 2025; Saudi Central Bank (SAMA), SAMA Decision on Repo and Reverse Repo Rates (10 December 2025), 10 December 2025; Central Bank of Egypt (CBE), MPC Press Release - August 28, 2025, 28 August 2025; Central Bank of Egypt (CBE), MPC Press Release - October 2, 2025, 2 October 2025; Emirates NBD, Emirates NBD Q3 2025 results press release, 23 October 2025; First Abu Dhabi Bank (FAB), Management Discussion & Analysis for the nine-month period ended 30 September 2025, 22 October 2025; National Bank of Kuwait (NBK), filed on Boursa Kuwait, 3Q/9M 2025 National Bank of Kuwait Earnings Call (edited transcript), 26 October 2025; Saudi Central Bank (SAMA), Key Economic Developments, Second Quarter 2025, 5 October 2025; Central Bank of the UAE (CBUAE), Summary Report: Monetary & Banking Developments - September 2025, 20 November 2025; Central Bank of the UAE (CBUAE), Quarterly Monetary, Banking & Financial Markets Developments Report, 2024 - 3rd Quarter, 30 November 2024; Central Bank of the UAE (CBUAE), CBUAE lowers the Base Rate by 25 basis points (17 September 2025, Arabic release), 17 September 2025; Central Bank of the UAE (CBUAE), CBUAE Lowers the Base Rate by 25 Basis Points (10 December 2025), 10 December 2025; Central Bank of Kuwait (CBK), CBK Cuts Discount Rate by 25 Basis Points to 3.75%, 17 September 2025; Central Bank of Kuwait (CBK), CBK Cuts the discount rate by 25 basis points to 3.50%, 10 December 2025; Central Bank of Bahrain (CBB), CBB Cuts Overnight Deposit Interest Rate by 25 basis points, 10 December 2025; Bank Al-Maghrib, Press release: Bank Al-Maghrib Board Meeting, Rabat, December 16, 2025, 16 December 2025; Al Rajhi Bank, Alrajhi bank's Net Profit rises by 30% to reach SAR 18,417 million for the first nine months of 2025, 20 October 2025; Central Bank of the UAE (CBUAE), Quarterly Monetary, Banking & Financial Markets Developments Report, 2025 - 2nd Quarter, 31 August 2025; Central Bank of Egypt (CBE), Financial Stability Report - March 2025, 4 November 2025; Central Bank of Egypt (CBE), Central Bank of Egypt Publishes the Financial Stability Report - March 2025, 4 November 2025.