MENA Banks (Sector Keys) "Post 1Q26: Resilient guidance and revisions" Peace

Research evidence excerpt

MENA Banks (Sector Keys) "Post 1Q26: Resilient guidance and revisions" Peace

Global Research

14 May 2026ab

MENA Banks (Sector Keys) Equities

EMEA EmergingPost 1Q26: Resilient guidance and revisions

Banks

Jon Peace

(1) FY26 guidance maintained even in more impacted GCC countries Analyst

We expected to see no material revision to FY26 guidance from Saudi banks as loan jon.peace@ubs.com

growth had already slowed to single digits in anticipation of higher capital requirements, +44-20-7567 0638

and a higher oil price would help support GDP and cost of risk expectations. However Luis Schmidt

with UAE banks having raised FY26 loan growth guidance to mid-teens post-Q4, and Associate Analyst

with the economy more at risk from disruption from the conflict, we expected a greater luis.schmidt@ubs.com

risk of guidance downgrades. Nevertheless, based on an assumption of an end to the +44-20-7567 0847

conflict during Q2 and a swift recovery in activity, the UAE banks also largely maintained

FY26 guidance. This was based on the strength of growth already in January and

February and a strong corporate pipeline, plus an expected acceleration in GRE

borrowing as the UAE government looked to support the economy. While most

UAE banks took provision overlays amounting to several hundred million Dirhams

(ADIB was an exception) a high level of prior year recoveries booked in Q1 made a

substantial offset, and also allowed them to maintain FY cost of risk guidance.

(2) MENA consensus revisions comparable to global context

Saudi banks generally met Q1 earnings expectations despite some non-II weakness from

regulatory fee caps, helped by a low cost of risk in the quarter. UAE banks generally beat

expectations helped by resilient non-II and significant provision recoveries which offset