Corporate and investment banking revenues in the Gulf are burgeoning as lenders underwrite the region’s economic transformation.
Lenders like what they are hearing from Gulf region businesses. Corporate and investment banking (CIB), which already accounted for more than half of total banking revenues in the Gulf Cooperation Council (GCC), is expanding at an annual rate of 14%, more than twice the regional average, according to a recent McKinsey study. Lenders expect CIB revenues to reach the $100 billion mark by 2030 as the region deepens its economic transformation.
“All GCC nations are actively working to diversify their economies away from hydrocarbon dependence, which will unlock significant growth opportunities in all sectors,” says Wissam Haddad, CEO of Riyadh-based SICO Capital, which is developing products and services geared toward emerging technologies.
From Saudi Arabia’s Vision 2030 blueprint to the United Arab Emirates’ digital and green ambitions, Gulf countries have embarked on multi-billion-dollar quests to reshape their economies. Countless initiatives across the board are boosting demand for complex financing solutions and banking services. “As governments prioritize large-scale infrastructure, energy transition, and technology-led growth, financial institutions are playing an increasingly strategic role,” says Abbas Husain, global head of Infrastructure and Development Finance at Standard Chartered. “In this environment, financing needs are becoming more sophisticated. There is growing interest in integrated capital solutions that combine bank lending with broader access to capital.” The Gulf ’s CIB client base is broad: from sovereign wealth funds and government-related entities to multinational firms entering the region, high-net-worth individuals, institutional investors, publicly listed companies, and small to midsized enterprises.
“In this environment, financing needs are becoming more sophisticated.”
Abbas Husain, Global Head of Infrastructure and Development Finance, Standard Chartered
“Many are deeply involved in executing national transformation agendas and are at the forefront of innovation, sustainability, and infrastructure development,” Husain notes. “What they increasingly have in common is the need for integrated, forward-looking financial solutions that support complex, multi-market strategies. This extends across debt financing, risk management, and strategic advisory, often with a strong cross-border dimension.”
Capital Markets
As the GCC economies evolve, so too are their capital markets, spanning debt issuance, equity offerings, and M&A, all of which are contributing to the sharp rise in CIB revenues. In the first quarter of 2025, M&A activity surged 66%, to reach $46 billion over 225 transactions, reports Ernst & Young, with the UAE accounting for more than half of all announced deals. The UAE and Saudi Arabian IPO markets have recorded steady growth of 10% to 15% year-on-year over the past decade.
“The surge in IPO activity, particularly in the UAE, is creating significant momentum,” says Karim Shoeib, group CEO, Investment Banking, at Al Ramz, a Dubai-based public joint-stock company. “Government-led privatizations and family business listings are expanding the investable universe and generating new opportunities for both institutional and retail clients.” Although the UAE and Saudi Arabia dominate market activity, he advises that investors keep an eye on other countries including Oman and Bahrain, where Al Ramz was recently licensed.
With family-owned businesses making up much of the private sector—around 90% in the UAE and 60% in Saudi Arabia—family listings look to be an important catalyst for capital market activity. The region is on the brink of an unprecedented generational wealth transfer; by 2030, over $1 trillion in assets is forecast to change hands, opening rare opportunities for investors to become shareholders of some of the region’s crown jewels.
A high-profile example is Emirati retail giant Majid Al Futtaim. Following the founder’s death without a will in 2021, years of internal disputes may culminate in an IPO.
“The region is witnessing an increasing number of company listings, strategic projects, a growing preference for more advanced and hybrid debt products, and continued consolidation,” says Haddad, “particularly in fragmented sectors such as hospitality and insurance. Many GCC countries have solid long-term strategic visions that emphasize sectoral diversification and privatization, which we believe will continue to drive robust demand for CIB services.”
Attracting Global Banks
Global financial institutions are ramping up their presence in the GCC. BNY Mellon recently established its regional headquarters in Riyadh, following Goldman Sachs and Citigroup, which were licensed last year.
US private equity firm I Squared Capital has committed $1 billion to Saudi infrastructure projects while Azura, a Monaco-based wealth management firm overseeing $5 billion in assets, is relocating its operations to Abu Dhabi. UBS also is set to open an office in the UAE capital and JPMorgan plans to hire over 100 additional staff to strengthen its already sizable Middle East presence.
“This is healthy and a reflection of the strong fundamentals and future potential of local markets,” Shoeib notes. “We view this development as a natural part of a maturing financial ecosys- tem that continues to evolve in both scale and sophistication.”
Regional banks retain key advantages, including deep client relationships, intimate knowledge of local regulatory environ- ments, and cultural proximity in areas like Islamic finance, but global entrants bring expansive balance sheets and often more advanced digital infrastructure.
Although the presence of global banks intensifies competition, “it also raises industry standards, introduces global best practices, and attracts deeper pools of capital to the region,” notes Haddad. “In many ways, international interest complements our efforts,” he adds, “broadening market participation and expanding the ecosystem rather than threatening it.”
Still, success for local players will demand more than just local familiarity and competitive products.
“To truly succeed in this environment, it is no longer sufficient to be just a source of liquidity,” says Husain, citing his clients’ interest in sustainable finance, digital transformation, and long-term capital structuring. “What differentiates institutions is the ability to offer holistic solutions grounded in local understanding and global reach. Deep relationships, consistent presence, and a track record of delivery are critical. What clients value is a strategic partner that can support them across their full lifecycle, from advisory through to execution and long-term financing.”
Challenges Ahead
Despite strong momentum, the GCC’s CIB sector faces significant headwinds. Geopolitical tensions, oil price volatility, new corporate tax regimes, and rising interest rates weigh on the cost of capital, dampening investor appetite and affecting deal execution timelines.
“Broader geopolitical tensions and global economic shifts, such as inflationary pressures and interest rate cycles, continue to shape investor sentiment across the region,” says Shoeib. “With GCC currencies pegged to the US dollar, navigating these macroeconomic dynamics requires agility and a steady focus on long-term value creation.”
Another structural challenge concerns the availability of qualified human capital and the sector’s ability to keep pace with rapid technological innovation, including generative AI. “The future of corporate and investment banking in the GCC will be shaped by those who can align innovation with execution and combine global connectivity with a strong understanding of regional ambition,” says Husain.
“Financial institutions that can operate across jurisdictions, connect global capital to local opportunity, and provide clarity in a complex landscape are well positioned to lead.” Concurrently, the GCC’s rising capital needs are putting pressure on liquidity. In most countries, credit demand is now outpacing deposit growth, driving loan-to-deposit ratios to historic highs. In Saudi Arabia, the ratio exceeds 100%, with private-sector lending projected to grow by 12% to 14% annually, while deposits are expected to rise by only 8% to 10%. This dynamic creates both opportunities and risks for regional lenders.
“CIBs must overcome funding shortages with record-high loan-to-deposit ratios—nearing or surpassing 100% in half of all GCC countries—which create potential liquidity constraints,” the recent McKinsey study concludes. “In addition, lower interest rates, with more cuts expected this year, are putting pressure on returns, given that approximately 85% of GCC banks’ income is based on interest.”
To maintain growth and profitability, Gulf-based banks will need to adapt. “Success requires banks to consider adjustments that may help them capture opportunities, remain competitive, and maintain recent momentum,” McKinsey argues, suggesting that local players focus on improving cost efficiency, diversify their loan portfolios, deepen their footprint in capital markets and trading, and expand transaction banking and foreign exchange services.
