All but two of the 20 largest banks in the Middle East and Africa saw their market value decline in the second quarter amid global market volatility, but most Saudi banks registered an uptick over a longer, six-month time frame.

United Arab Emirates-based First Abu Dhabi Bank PJSC recorded the steepest market cap decline in the three months to June 30, of 20.42%, S&P Global Market Intelligence data shows. Saudi Arabia's Al Rajhi Banking & Investment Corp., which has the largest overall market cap, also registered a big drop. Only Saudi Arabia-based Arab National Bank and Saudi British Bank saw their market value rise.

The downturn in the second quarter comes as inflationary fears and soaring commodity prices triggered by the Russia-Ukraine war continue to roil markets globally.

But banks in the Global Cooperation Council region, which have managed to weather regional geopolitical shocks in the past three decades, are set to remain resilient against this backdrop, S&P Global Ratings said in a recent report. The bloc's fast-expanding economies help bolster corporate activity and consistent population growth, which underpin deposit expansion and offset outflows, allowing GCC banks to maintain deposit stability despite geopolitical tensions, Ratings wrote.

The rating agency expects most GCC banking systems to withstand future potential substantial external funding outflows without additional support.

Over the first six months of 2022, banks in Saudi Arabia led a broad increase in market capitalization among the biggest MEA banks.

Alinma Bank's market cap increased 39.40% to $17.80 billion. Arab National Bank, Bank Albilad, Saudi British Bank and Riyad Bank also recorded an uptick.

Saudi Arabia's biggest banks posted higher first-quarter profits amid continued economic growth, ongoing structural reforms and better oil sector dynamics. Along with their peers in the GCC, Saudi Arabian banks are poised to benefit from expected interest rate hikes.

Kuwait Finance House KSCP and National Bank of Kuwait SAKP also logged market cap increases in the six months to June 30 but suffered declines in the second quarter.

*Access indexes including regional bank indexes on the CapIQPro platform. * Learn more about the aggregate financial highlights for banks in the UAE and Saudi Arabia.