BE - September 2026

AI in Arab Banks Gulf banks have learned to talk fluently about artificial intelligence. The evidence says they have not yet learned to earn from it. Closing that gap is a management job, not a technology one. There is a sentence that now ap- pears, in one form or another, in al- most every annual report published by a Gulf bank: artificial intelligence is central to our strategy. Ten years ago, it appeared in roughly one in ten reports. Today, it opens with the chief executive’s letter, anchors the strategy section, and has its own board committee. That shift is real and it matters. A sec- tor that hesitated over cloud comput- ing a decade ago has decided, collectively and quickly, that ma- chine intelligence is its future. Na- tional agendas across the Arab world have supplied both the mandate and the political cover. But beneath the first pattern lies a second, less comfortable one. We read ten years of annual reports from banks across the six Gulf states, 692 in all, extracting every passage in which AI was discussed and setting it against each bank’s financial re- sults. The banks that talk most about artificial intelligence are not, so far, the banks earning the most from it. Across the sector, the relationship be- tween what an institution says about AI and what it earns is effectively zero. This is not a case against the technology. It is a reading of where the sector actually stands, which is early, and of the decisions bank boards would do well to take now, while the field is still open. FLUENT, NOT YET PROFITABLE Start with the speed of the change. In 2016, about one Gulf bank report in ten discussed AI in any substantive way. By 2025, it was close to seven in ten. Few strategic themes in mod- ern banking have traveled that far, that fast. Performance has not traveled with it. Put any two Gulf banks side by side and the one that writes more about AI is not reliably the more profitable. That holds for return on assets and return on equity, and it holds after adjusting for size, asset quality and the economy each bank operates in. Follow individual banks through time and a faint positive signal does emerge: institutions tend to do slightly better in years when they de- scribe their AI work with more con- fidence. The effect is small, sits at the edge of statistical significance and weakens considerably once the re- gion’s most advanced market is re- moved from the sample. It is a hint, not a result, and we report it as such. Meanwhile, the variable that domi- nates everything else is the oldest one in banking. The quality of the loan book predicts Gulf Bank's prof- itability better than any technology measure, better than growth, and better than the macroeconomic backdrop. Whatever AI eventually does for this sector, it has not yet dis- placed credit discipline as the thing that separates strong banks from weak ones. ISSUE 213 SEPTEMBER 2026 the BANKING EXECUTIVE 45 Talking about AI: share of Gulf bank annual reports discussing artificial intelligence, 2016–2025 Source: Authors’ analysis of 692 annual reports published by banks in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, 2016–2025.