The widening conflict involving Iran, Israel and the United States has cast a tense backdrop across the Gulf, yet the region’s investment banks are pressing ahead with business—albeit from living rooms, home offices and improvised remote setups.
Across the GCC, financial institutions say their dealmaking machinery remains intact even as security concerns ripple through the region. Many bankers who spent the past two years riding a surge of bond and equity offerings are now logging in from home, keeping transactions moving while monitoring geopolitical developments closely.
The unease sharpened earlier in the week after Iran’s Islamic Revolutionary Guard Corps warned it could target economic hubs and financial institutions tied to U.S. and Israeli interests in the region. The statement heightened fears that banks with large regional footprints could face operational disruptions.
For now, however, the industry says it is adapting rather than retreating.
Several global banks with large Gulf presences have shifted staff to remote work as a precaution. Operations, client services and deal teams continue functioning, executives say, with most activity redirected to digital platforms while offices remain on standby.
Citi said the overwhelming majority of its employees in the United Arab Emirates are working remotely after the bank implemented a full work-from-home arrangement for UAE-based staff. The shift followed the evacuation of three office buildings in the country as a safety measure. The bank said all employees were safe and that client services continue without interruption.
HSBC, a long-standing heavyweight in Gulf capital markets and a consistent leader in regional deal rankings, said it is following government guidance while activating internal contingency plans for staff and operations. The bank emphasized its long-term commitment to the region, pointing to more than a century of presence in Middle Eastern markets and expressing confidence in the region’s ability to weather disruptions.
Standard Chartered also moved employees to remote work as a precaution but pushed back on speculation that it had evacuated its Dubai workforce. The bank said it continues to support clients across the Middle East while closely watching the evolving situation.
Deutsche Bank, which oversees a significant portion of its Middle East investment banking activity from hubs in London and Dubai, said regional operations remain unaffected so far. Local branches are continuing to operate under guidance from authorities, though travel into the region has been paused and staff in affected areas are working remotely.
While banks keep operations running, financial markets are already feeling the tremors.
The year had begun with remarkable momentum in Gulf debt markets. January alone saw more than $30 billion raised—an unusually strong start that signaled investor appetite for Gulf issuers despite lingering geopolitical tensions.
That optimism has cooled.
Debt issuance across the GCC has slowed noticeably since the conflict escalated, with several transactions delayed as investors digest rising uncertainty and market volatility. The region has become a central pillar of emerging-market debt fundraising, accounting for roughly 40 percent of dollar-denominated issuance in 2026 outside China, making any slowdown particularly significant for global markets.
Analysts say the trajectory of Gulf capital markets now hinges on how the conflict unfolds. The longer and broader the confrontation becomes, the greater the risk that borrowing costs climb and deals remain sidelined.
Bond and sukuk yields have already drifted higher since the hostilities began. The widening has been most visible among lower-rated borrowers, while Islamic bonds from the Middle East have held up comparatively well, reflecting continued investor demand.
Market veterans note that similar spikes in yields have occurred during past geopolitical flare-ups, though the current movements remain well below the extremes seen in earlier regional crises. Historically, issuance activity tends to rebound once tensions ease.
Despite the turbulence, the Gulf’s broader fundraising ambitions remain intact—for now.
After raising about $5.1 billion through 40 initial public offerings last year, the region had been preparing for a far busier listing calendar in 2026. Analysts estimate that more than 70 companies across the GCC could head to public markets this year, with Saudi Arabia and the United Arab Emirates expected to dominate the pipeline.
Whether those plans unfold on schedule may depend less on market appetite—and more on the direction of a conflict unfolding far beyond trading floors.
