{"id":120066,"date":"2025-06-26T14:26:12","date_gmt":"2025-06-26T18:26:12","guid":{"rendered":"https:\/\/www.bloomberg.com\/professional\/insights\/regional-analysis\/uae-banks-growth-vs-saudi-lenders-oil-risk\/"},"modified":"2025-07-15T15:13:38","modified_gmt":"2025-07-15T19:13:38","slug":"uae-banks-growth-vs-saudi-lenders-oil-risk","status":"publish","type":[3762],"link":"https:\/\/www.bloomberg.com\/professional\/insights\/regional-analysis\/uae-banks-growth-vs-saudi-lenders-oil-risk\/","title":{"rendered":"UAE banks&#8217; growth vs. Saudi lenders&#8217; oil risk"},"content":{"rendered":"<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-compact row-padding--bottom-none bbg-row--full-bg-bleed\" data-anchor='row-6a0919e525748'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-7\"\n    style=\"\"\n    >\n    <p><div\n    class=\"bbg-spacer bbg-spacer--lg\"\n    >\n<\/div><div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p class=\"small\"><strong><span style=\"font-size: 14px; letter-spacing: 1px; color: #0062dd;\">ARTICLE<\/span><\/strong><\/p>\n\n<\/div>\n<div\n    class=\"bbg-spacer bbg-spacer--sm\"\n    >\n<\/div>    <h1 class=\"bbg-metadata bbg-metadata--title\">UAE banks&#8217; growth vs. Saudi lenders&#8217; oil risk<\/h1>\n<div\n    class=\"bbg-spacer\"\n        style=\"height: 50px !important\"\n    >\n<\/div>    <ul class=\"bbg-categories_list\">\n                    <li>\n                <a href=\"https:\/\/www.bloomberg.com\/professional\/insights\/category\/markets\/\" rel=\"category tag\">\n                    Markets\n                <\/a>\n            <\/li>\n                    <li>\n                <a href=\"https:\/\/www.bloomberg.com\/professional\/insights\/category\/regional-analysis\/\" rel=\"category tag\">\n                    Regional Analysis\n                <\/a>\n            <\/li>\n            <\/ul>\n<\/p>\n\n<\/div><div\n    class=\"bbg-column bbg-column--width-5\"\n    style=\"\"\n    >\n    <div id=\"\" class=\"wpb_content_element bbg-single-image align-left\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"4000\" height=\"2667\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/363657226-1.jpg\" class=\"bbg-single-image__image attachment-full\" alt=\"Sunset over buildings at the King Abdullah Financial District in Riyadh, Saudi Arabia\" title=\"363657226-1\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/363657226-1.jpg 4000w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/363657226-1.jpg 552w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/363657226-1.jpg 800w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/363657226-1.jpg 768w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/363657226-1.jpg 1536w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/363657226-1.jpg 2048w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/363657226-1.jpg 162w\" sizes=\"auto, (max-width: 4000px) 100vw, 4000px\" \/>\n        \n            <\/figure>\n<\/div>\n\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none row-padding--bottom-none bbg-row--full-bg-bleed\" data-anchor='row-6a0919e531b0e'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-6 bbg-column--m-width-6\"\n    style=\"\"\n    >\n    <p>    <p class=\"bbg-metadata bbg-metadata--date\">June 26, 2025<\/p>\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p><strong>Bloomberg Intelligence<\/strong><\/p>\n\n<\/div>\n\n<\/div><div\n    class=\"bbg-column bbg-column--width-2 bbg-column--valign-middle bbg-column--m-width-2 bbg-column--s-padding-right-2\"\n    style=\"\"\n    >\n    <div class=\"bb-tts\"\n\tdata-selector=\"main\"\n\tdata-label=\"Speak this page\"\n\tdata-custom-play=\"Play\"\n\tdata-custom-pause=\"Pause\"\n\tdata-custom-stop=\"Stop\"\n\tdata-overlay=\"false\"\n\tdata-invert=\"false\"\n\tdata-no-time=\"false\"\n\tdata-no-button-text=\"false\"\n\tdata-one-button=\"true\"\n\tdata-one-style=\"true\"\n\tdata-hide-stop=\"true\"\n\tdata-voice=\"Gordon\"\n\tdata-pitch=\"1\"\n\tdata-speed=\"1\"\n\tdata-align=\"flex-start\"\n>\n<\/div>\n\n\n<\/div><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-compact row-padding--bottom-compact bbg-row--full-bg-bleed\" data-anchor='row-6a0919e534841'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <p><div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p><i><span style=\"font-weight: 400;\">This article was written by Bloomberg Intelligence Senior Industry Analyst Edmond Christou. It appeared first on the Bloomberg Terminal.<\/span><\/i><\/p>\n<p class=\"p2\">UAE lenders&#8217; forward price-to-book ratio of 1.4x vs. Saudi banks&#8217; 1.3x is supported by the formers&#8217; ability to capture strong domestic and Saudi growth and healthy balance sheets, despite rate-cut sensitivity. Saudi lenders&#8217; P\/B reflects concern that oil prices will hurt profitability and an uncertain outlook for its &#8220;giga&#8221; construction pipeline.<\/p>\n<h2 class=\"p2\">Investors price more risk for Saudi banks than UAE peers<\/h2>\n<p class=\"p2\">Saudi banks have traded at a 1.3x forward price-to-book vs. 1.4x for UAE peers since May amid concern that oil prices will hurt Saudi profitability. UAE lenders&#8217; stocks have been supported by fewer-than-expected rate cuts and healthier balance sheets that are capturing credit growth inSaudi Arabia, despite their earnings sensitivity to lower interest rates. The Saudi pipeline is double the size of the UAE&#8217;s yet has similar value, excluding the uncertainty around &#8220;giga&#8221; &#8212; or large-scale &#8212; projects. Saudi banks&#8217; P\/B ratio was 1.6x in early 2024 and hit a 2.3x peak in May2022 on higher funding costs and lower returns. Catalysts for a rerating include better market liquidity and pricing to improve tight lending spreads.<\/p>\n<p class=\"p2\">UAE banks&#8217; P\/B has trended up since late 2020 due to robust property-market and private-sector activity.<\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"1756\" height=\"1122\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-1-Gulf-Lenders-PB-Multiples.png\" class=\"bbg-single-image__image attachment-full\" alt=\"Figure 1 - Gulf Lenders PB Multiples\" title=\"Figure-1-Gulf-Lenders-PB-Multiples\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-1-Gulf-Lenders-PB-Multiples.png 1756w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-1-Gulf-Lenders-PB-Multiples.png 552w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-1-Gulf-Lenders-PB-Multiples.png 800w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-1-Gulf-Lenders-PB-Multiples.png 768w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-1-Gulf-Lenders-PB-Multiples.png 1536w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-1-Gulf-Lenders-PB-Multiples.png 169w\" sizes=\"auto, (max-width: 1756px) 100vw, 1756px\" \/>\n        \n            <\/figure>\n<\/div>\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none row-padding--bottom-none bbg-row--margin-top-compact bbg-row--margin-bottom-compact bbg-row--full-bg-bleed\" data-anchor='row-6a0919e538bde'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column\"\n    style=\"\"\n    >\n    <div class=\"bbg-interstitial\" aria-label=\"interstitial\" tabindex=\"0\">\n\t<style>\n\t\t.bbg-interstitial #card_1.bbg-card_hasCta{\n\t\t\tbackground: url(https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Interstitial_bg.png);\n\t\t\t\tbackground-repeat: no-repeat;\n\t\t\t\tbackground-position: center center;\n\t\t\t\tbackground-size: cover;\n\t\t\tpadding: 104px;\n\t\t\t\n\t\t\t\n\t\t}\n\t\t.bbg-interstitial #card_1.bbg-card_hasCta 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<div\n    class=\"bbg-cta-link link-holder\"\n    data-links-type=\"cta-links\">\n    <p class=\"bbg-cta-p right\">\n      <a\n        class=\"bbg-cta-link link interstitial_cta\"\n        href=\"https:\/\/www.bloomberg.com\/professional\/insights\/newsletter\/\"\n        target=\"\"\n        rel=\"\"\n        data-section-name=\"\"\n                role=\"button\"\n        aria-label=\"Learn more\"\n        >\n                <\/a>\n    <\/p>\n  <\/div>\n<\/div>\n\n      <\/div>\n\n  <\/div>\n\n<\/div>\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-compact row-padding--bottom-none bbg-row--full-bg-bleed\" data-anchor='row-6a0919e53f215'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2 class=\"p2\">UAE pipeline similar to Saudi&#8217;s excluding giga deals<\/h2>\n<p class=\"p2\">Saudi Arabia&#8217;s construction pipeline is valued close to the UAE&#8217;s of about $210 billion over the next two years and $420 billion over five years excluding giga projects, which face execution uncertainty. The value of projects in both pipelines that are either beyond five years or on hold is about $330 billion. The UAE pipeline offers local banks a similar growth trajectory to Saudi banks(if giga projects are excluded), yet the UAE market has been flushed with liquidity compared withSaudi Arabia, which has led to corporate and public-sector entities repaying loans earlier, dampening the new-loan origination rate in the UAE. The Saudi market&#8217;s tight liquidity means demand for credit from corporate and government-related entities is strong, giving UAE banks an opportunity to offer cross-border lending.<\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"1754\" height=\"1214\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-2-Saudi-Non-Giga-Projects-vs-UAE-Pipeline.png\" class=\"bbg-single-image__image attachment-full\" alt=\"Figure 2 - Saudi Non-Giga Projects vs UAE Pipeline\" title=\"Figure-2-Saudi-Non-Giga-Projects-vs-UAE-Pipeline\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-2-Saudi-Non-Giga-Projects-vs-UAE-Pipeline.png 1754w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-2-Saudi-Non-Giga-Projects-vs-UAE-Pipeline.png 552w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-2-Saudi-Non-Giga-Projects-vs-UAE-Pipeline.png 800w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-2-Saudi-Non-Giga-Projects-vs-UAE-Pipeline.png 768w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-2-Saudi-Non-Giga-Projects-vs-UAE-Pipeline.png 1536w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-2-Saudi-Non-Giga-Projects-vs-UAE-Pipeline.png 156w\" sizes=\"auto, (max-width: 1754px) 100vw, 1754px\" \/>\n        \n            <\/figure>\n<\/div>\n\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2 class=\"p2\">$567 billion of Saudi giga projects at risk<\/h2>\n<p class=\"p2\">Neom&#8217;s mixed-use developments make up a large part of the $753 billion giga-project pipeline, of which $186 billion is likely to be executed over the next five years, based on MEED data. The remaining $567 billion faces uncertainty and could be put on hold or subject to cancellations as the government reprioritizes its spending amid low oil prices. Projects in housing, infrastructure and retail account for the majority of the five-year pipeline.<\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"1754\" height=\"1064\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-3-KSAs-Giga-Project-Pipeline-Exc-Energy-Sector.png\" class=\"bbg-single-image__image attachment-full\" alt=\"Figure 3 - KSAs Giga Project Pipeline Exc Energy Sector\" title=\"Figure-3-KSAs-Giga-Project-Pipeline-Exc-Energy-Sector\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-3-KSAs-Giga-Project-Pipeline-Exc-Energy-Sector.png 1754w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-3-KSAs-Giga-Project-Pipeline-Exc-Energy-Sector.png 552w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-3-KSAs-Giga-Project-Pipeline-Exc-Energy-Sector.png 800w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-3-KSAs-Giga-Project-Pipeline-Exc-Energy-Sector.png 100w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-3-KSAs-Giga-Project-Pipeline-Exc-Energy-Sector.png 768w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-3-KSAs-Giga-Project-Pipeline-Exc-Energy-Sector.png 1536w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-3-KSAs-Giga-Project-Pipeline-Exc-Energy-Sector.png 178w\" sizes=\"auto, (max-width: 1754px) 100vw, 1754px\" \/>\n        \n            <\/figure>\n<\/div>\n\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2 class=\"p2\">Future of $904 billion pipeline projects uncertain<\/h2>\n<p class=\"p2\">Giga projects make up 34% of Saudi Arabia&#8217;s two-year construction pipeline and up to 24% over the next five years, with smaller-sized projects accounting for the largest share near term.Projects on hold or which have no time line have been valued at $904 billion, of which 63% are giga projects. About $107 billion worth of projects was put on hold between August 2024 andMarch this year, equivalent to almost half of awarded project value in the last two years, according to MEED data.<\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"1758\" height=\"1180\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-4-Saudi-Construction-Project-Pipeline.png\" class=\"bbg-single-image__image attachment-full\" alt=\"Figure 4 - Saudi Construction Project Pipeline\" title=\"Figure-4-Saudi-Construction-Project-Pipeline\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-4-Saudi-Construction-Project-Pipeline.png 1758w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-4-Saudi-Construction-Project-Pipeline.png 552w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-4-Saudi-Construction-Project-Pipeline.png 800w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-4-Saudi-Construction-Project-Pipeline.png 768w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-4-Saudi-Construction-Project-Pipeline.png 1536w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-4-Saudi-Construction-Project-Pipeline.png 161w\" sizes=\"auto, (max-width: 1758px) 100vw, 1758px\" \/>\n        \n            <\/figure>\n<\/div>\n\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2 class=\"p2\">10-12% loan growth, $10-$13 billion debt on non-giga<\/h2>\n<p class=\"p2\">Saudi Arabia&#8217;s construction pipeline remains strong at $210 billion over the next two years and $600 billion over the next five years, even after excluding giga projects. That implies a potential corporate loan-growth rate for banks of 10-12% annually over the period, based on 50-60% local credit utilization for these projects. Saudi lenders would need to issue at least $10-$13 billion of new debt annually to support their balance-sheet expansion, we calculate, assuming the wholesale funding mix remains at an 18\/82 loan-to-deposit ratio.<\/p>\n<p class=\"p2\">Still, excluding giga projects, Saudi Arabia&#8217;s construction pipeline looks close to the UAE&#8217;s total future pipeline of $201 billion over the next two years and $420 billion up to five years.<\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"1770\" height=\"672\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-5-Saudi-Non-Giga-Project-Pipeline-Exc.-Energy-Sector.png\" class=\"bbg-single-image__image attachment-full\" alt=\"Figure 5 - Saudi Non-Giga Project Pipeline Exc. Energy Sector\" title=\"Figure-5-Saudi-Non-Giga-Project-Pipeline-Exc.-Energy-Sector\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-5-Saudi-Non-Giga-Project-Pipeline-Exc.-Energy-Sector.png 1770w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-5-Saudi-Non-Giga-Project-Pipeline-Exc.-Energy-Sector.png 552w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-5-Saudi-Non-Giga-Project-Pipeline-Exc.-Energy-Sector.png 800w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-5-Saudi-Non-Giga-Project-Pipeline-Exc.-Energy-Sector.png 768w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-5-Saudi-Non-Giga-Project-Pipeline-Exc.-Energy-Sector.png 1536w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-5-Saudi-Non-Giga-Project-Pipeline-Exc.-Energy-Sector.png 192w\" sizes=\"auto, (max-width: 1770px) 100vw, 1770px\" \/>\n        \n            <\/figure>\n<\/div>\n\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p class=\"p2\">Revenue growth at 4-5% unless more other income or less cut<\/p>\n<p class=\"p2\">The top five UAE banks&#8217; revenue prospects may improve if fewer than two rate cuts are fully priced in, pushing 2025 revenue growth beyond 4-5%, given lesser than a 10-15-bp margin drag this year. Competitive pricing may ease, given lenders could take action to improve lending spreads to mitigate rate-cut pressure. Also, ample liquidity may allow lenders to partially navigate the pressure. Nonfunded income share of topline is expected to be 30% in 2025-26 slightly below 31% a year earlier, but any gain in the contribution of other income to top line may offset the expected EPS 3% decline this year (6% drag previously).<\/p>\n<p class=\"p2\">Cost of risk may normalize up by as much as 15-17 bps in 2025 to more than 60 bps. This, together with an increased corporate-tax rate to 15% (9% last year) may trim ROE close to13.8% (15.4% in 2024).<\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"1756\" height=\"912\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-6-UAE-Bank-Consensus.png\" class=\"bbg-single-image__image attachment-full\" alt=\"Figure 6 - UAE Bank Consensus\" title=\"Figure-6-UAE-Bank-Consensus\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-6-UAE-Bank-Consensus.png 1756w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-6-UAE-Bank-Consensus.png 552w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-6-UAE-Bank-Consensus.png 800w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-6-UAE-Bank-Consensus.png 768w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-6-UAE-Bank-Consensus.png 1536w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-6-UAE-Bank-Consensus.png 192w\" sizes=\"auto, (max-width: 1756px) 100vw, 1756px\" \/>\n        \n            <\/figure>\n<\/div>\n\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2 class=\"p2\">Revenue, EPS have room to run if margin dynamics change<\/h2>\n<p class=\"p2\">If Saudi banks&#8217; loan pricing and cost of funding are supportive of margin in the coming quarters, there&#8217;s scope for consensus upgrades to revenue and EPS in 2025, with the possibility of top-line estimates being raised by two percentage points (based on our calculations). Expectations currently point to an 11% revenue gain, 12% loan growth and a margin trim of 5-6 bps. Consensus calls for 2026 net interest income to rise 10% on anticipated industry lending growth of 11% and 4-5-bp margin setback. There&#8217;s upside from fewer rate cuts and a falling oil price. EPS is seen up 8% in 2025, with this rate sustained in 2026 with a return on equity (ROE) of 14% in2025-26 (13% in 2024).<\/p>\n<p class=\"p2\">Analysts see cost of risk (COR) rising to 38 bps in 2025 (34 bps in 2024), but COR above 45 bps in 2026 threatens ROE.<\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"1754\" height=\"1420\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-7-Saudi-Banks-Analysts-Consensus.png\" class=\"bbg-single-image__image attachment-full\" alt=\"Figure 7 - Saudi Banks Analysts Consensus\" title=\"Figure-7-Saudi-Banks-Analysts-Consensus\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-7-Saudi-Banks-Analysts-Consensus.png 1754w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-7-Saudi-Banks-Analysts-Consensus.png 552w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-7-Saudi-Banks-Analysts-Consensus.png 800w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-7-Saudi-Banks-Analysts-Consensus.png 768w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-7-Saudi-Banks-Analysts-Consensus.png 1536w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Figure-7-Saudi-Banks-Analysts-Consensus.png 133w\" sizes=\"auto, (max-width: 1754px) 100vw, 1754px\" \/>\n        \n            <\/figure>\n<\/div>\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none bbg-row--full-bg-bleed\" data-anchor='row-6a0919e55019b'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <div class=\"bbg-accordion transparent\">\n\t<input type=\"checkbox\"  id=\"bbg-accordion-toggle-6a0919e551991\">\n\t<div class=\"bbg-accordion-parent\" data-accordion-toggle aria-expanded=\"false\">\n\t\t<label class=\"bbg-accordion-label\" for=\"bbg-accordion-toggle-6a0919e551991\">\n\t\t\t\t<h5 class=\"bbg-accordion-title\" data-label=\"Disclaimer\">\n\t\tDisclaimer\n\t<\/h5>\n\n\t\t\t\t\t<\/label>\n\t<\/div>\n\t<div class=\"bbg-accordion-content\">\n\t\t<div class=\"bb-wysiwyg\">\n\t<p>The data included in these materials are for illustrative purposes only. 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