Emirates NBD Bank PJSC reported the biggest profit increase among its largest regional peers in the second quarter, S&P Global Market Intelligence data shows.

Dubai's largest lender by assets reported a quarterly net income equivalent to $1.70 billion, jumping nearly 79% year over year. The bank's year-ago result was stymied by net adjustments on monetary positions related to hyperinflation in Turkey. Even so, Emirates NBD benefited significantly from higher net interest income (NII).

Elsewhere among a sample of the Gulf region's five largest banks, First Abu Dhabi Bank PJSC's quarterly income grew more than 45% to $1.15 billion, while that of Saudi National Bank (SNB) increased about 10%. Qatar National Bank QPSC (QNB) and Al Rajhi Banking & Investment Corp. reported income that was lower by about 4.6% and 2.6%, respectively.

The banks had been expected to enjoy higher profitability thanks to a significant boost from rising interest rates. As most Gulf currencies are pegged to the dollar, more rate hike benefits are expected. The US Federal Reserve recently increased its base rate by 25 basis points — a move mirrored by its counterparts in the Gulf — and left the door open for further increases.

NII, the difference between interest revenues earned from lending activities and interest paid to depositors, rose on both yearly and quarterly bases for Emirates NBD and First Abu Dhabi. QNB's net interest income was flat year over year, while that of SNB and Al Rajhi dipped slightly.

Collectively, the sampled banks' NII rose to $7.66 billion from the year-ago $7.55 billion.

QNB, the largest lender by assets in the Middle East, booked the highest volume of loan loss provisions in the sample at $617.9 million, up from the year-ago $561.3 million.

The bank decided to frontload expected credit losses in the first half, according to Durraiz Khan, QNB's senior vice president for financial consolidation. For the full year, the bank expects a cost of risk of around 95 basis points, which would be down year over year, Khan said during an earnings call.

SNB reported a sharp year-over-year drop in provisions to $20.29 million while Al Rajhi's provisions fell to $96 million.