Investment banks across the Gulf are keeping their engines running—even as rising tensions in the Middle East force a temporary shift in how business gets done.
With the conflict involving Iran, Israel and the United States entering its second week, financial institutions operating in the Gulf Cooperation Council (GCC) say their regional activities remain intact. Offices may be quieter, but deal teams are still working—mostly from home—as firms prioritize staff safety while maintaining client services.
The situation intensified earlier this week when Iran’s Islamic Revolutionary Guard Corps warned that economic centers and financial institutions linked to U.S. and Israeli interests in the region could become targets. The statement added another layer of uncertainty for financial hubs such as Dubai and Abu Dhabi, prompting several banks to move staff offsite.
At HSBC, which has topped LSEG league tables for the past three years, employees in the UAE have largely shifted to remote work. The bank says its contingency plans and government guidance are shaping how it manages operations during the current crisis.
Despite the tensions, the bank’s leadership struck a note of confidence about the region’s long-term outlook. The Gulf, it said, has weathered disruptions before and repeatedly demonstrated its ability to adapt and recover.
Citi, which anchors much of its regional activity in Dubai, has adopted a fully remote working model for UAE-based staff. The bank confirmed that it temporarily evacuated three buildings in the country after receiving security-related information, though it stressed that all employees remain safe and accounted for. Client services, the bank said, continue without interruption.
Meanwhile, Standard Chartered dismissed speculation that it had evacuated personnel from its Dubai offices. While monitoring developments closely, the bank noted that the UAE and other Middle Eastern markets remain key parts of its global network. A precautionary work-from-home policy introduced last week is still in place.
Deutsche Bank, which manages a large portion of its Middle East investment banking business from London and Dubai, also said operations in the region remain unaffected so far. Offices are continuing to function in line with guidance from local authorities, though travel to the region has been suspended and staff in affected locations are working remotely.
Markets Feel the Tension
The geopolitical flare-up arrives at a delicate moment for Gulf capital markets.
The year began with remarkable momentum. Saudi Arabia led a surge in debt issuance that saw more than $30 billion raised across the GCC in January alone—an unusually strong start that suggested investors were brushing aside geopolitical anxieties.
That momentum has since slowed.
Ratings agency Fitch says debt issuance across the GCC has dropped sharply since the conflict began, with several planned deals now paused as investors reassess risk and volatility creeps into the market. The slowdown matters globally: the Gulf accounts for nearly 40% of emerging-market dollar debt issuance so far this year, excluding China.
Bond and sukuk yields have widened since the escalation of hostilities, though the increase has been sharper for lower-rated issuers. Islamic bonds from the region have held up relatively better, reflecting steady demand among investors.
Analysts note that similar yield swings have appeared during past geopolitical flashpoints, but current levels remain below the extremes seen in earlier crises. Historically, capital markets in the region have tended to reopen quickly once tensions ease.
IPO Ambitions on Pause?
Before the latest conflict erupted, the Gulf was preparing for another lively year of stock listings.
Companies across the GCC raised about $5.1 billion through 40 initial public offerings last year. Market watchers expected an even busier pipeline in 2026, with roughly 73 deals potentially heading to market. Saudi Arabia and the UAE were expected to dominate the IPO calendar.
For now, bankers are watching the geopolitical landscape as closely as they watch their deal pipelines. The region’s financial machinery is still running—but investors are clearly waiting to see how the conflict unfolds before committing fresh capital.
