Related Articles

• 
  Saudi Arabia’s foreign property ownership milestone

  9 April 2026

  Saudi Arabia’s Real Estate Ownership Law, which came into force in January 2026, represents a significant and long-anticipated development in the kingdom’s approach to foreign ownership of real estate.

  It forms part of a broader evolution of the regulatory framework governing the sector, aimed at enhancing transparency, strengthening investor confidence, and supporting long-term market development in line with Vision 2030.

  As the framework begins to be implemented, market participants are increasingly focused on how these provisions will operate in practice and the implications for structuring real estate investments in the kingdom.

  Under the previous legislative framework, introduced in 2000, foreign ownership of Saudi property was more restricted. Ownership was generally limited to individuals or entities authorised to carry out professional or commercial activities in the kingdom, with property rights closely linked to those activities rather than broader investment or personal use.

  The law builds on this position by expanding both the categories of eligible owners and the scope of permitted real estate rights.

  The new law applies a broad definition of “non-Saudi”, encompassing foreign individuals, companies, non-profit organisations and other legal entities, within a structured and regulated framework.

  Expanding ownership rights

  Non-Saudi individuals, whether resident in the kingdom or abroad, may own real estate or acquire real property rights within designated geographical areas, as provided for under the implementing regulations.

  The law permits both ownership and the acquisition of other real property rights in accordance with applicable laws and regulations. In practice, this provides a clearer basis for foreign investors to assess how real estate interests may be structured within the kingdom.

  Non-Saudi residents are also permitted to own one residential property outside those designated areas. This does not extend to cities of religious significance, including Mecca and Medina, except where permitted under the applicable legal and regulatory framework.

  Foreign-owned Saudi companies may own real estate and acquire other real property rights necessary to conduct their licensed activities and to provide housing for employees, both within and outside designated geographical areas. This may, subject to applicable regulatory conditions, extend to properties in Mecca and Medina.

  While ownership in the holy cities remains subject to specific regulatory controls, the new law provides a more clearly defined framework under which foreign participation may be permitted in accordance with applicable requirements.  

  With respect to publicly listed companies, Saudi firms with foreign ownership listed on the Saudi Stock Exchange (Tadawul), as well as investment funds and special purpose entities, may own and acquire real property rights in the kingdom, including in Mecca and Medina, subject to compliance with the relevant regulatory framework.

  Registration, compliance and transactional framework

  The new Real Estate Ownership law introduces a structured compliance framework for foreign investors. It provides that all non-Saudis, whether corporations or individuals, are required to comply with applicable registration requirements with the competent authorities prior to owning real estate or acquiring other real property rights in the kingdom.

  The implementing framework sets out procedures that vary depending on the type of investor. For example:

  • Non-resident individuals are required to obtain a valid digital identity profile through the Ministry of Interior’s “Absher” platform, open a Saudi bank account, and obtain a Saudi contact number.
  • Foreign companies are required to register with the Ministry of Investment, ensure that their legal representatives hold valid identification issued in accordance with the kingdom’s regulations, disclose their ownership structures, and open a Saudi bank account.

  Ownership of real estate and the acquisition of related property rights will only be legally recognised once registration has been completed with the Real Estate Register in accordance with the applicable legal provisions. This reinforces transparency and legal certainty within the market.  

  The law also regulates the disposal of property interests. Where a non-Saudi sells, transfers or otherwise disposes of a real property right, a disposal fee capped at 5% of the transaction value is payable to the Real Estate General Authority. This fee applies in addition to any other taxes or charges. The applicable rate may vary depending on the type, purpose and location of the property right, as set out in the relevant regulations.

  Investors should also be aware of the law’s tiered penalty regime. Depending on the nature of the violation, penalties may range from a warning to fines capped at SR10m, with multiple penalties potentially applied for separate breaches.

  The law reflects the kingdom’s continued focus on enhancing the regulatory environment for real estate, within a structure designed to balance market access with appropriate regulatory oversight. For investors and developers, the practical significance of the law lies in the clarity it provides on how foreign ownership can be structured and implemented. In particular, requirements relating to registration, ownership eligibility and permitted use will be key considerations when assessing transactions and investment structures.

  As the implementing framework continues to develop, further detail, particularly in relation to designated geographical areas and the application of ownership rules in specific locations, will be important in shaping how the framework operates in practice.

  More broadly, the law forms part of a wider programme of reforms aimed at supporting the sustainable development of Saudi Arabia’s real estate market and reinforcing its long-term attractiveness for investment, in line with the objectives of Vision 2030.

  

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• 
  War in the Middle East recalibrates global energy markets

  9 April 2026

  

   

  The US and Israel’s war with Iran, and the disruption it is causing to oil and gas shipping, are having a deep impact on global energy markets and will have lasting effects on how decisions are made about energy production and consumption.

  In March, the director of the Paris-based International Energy Agency, Fatih Birol, said the world was “facing the greatest global energy security threat in history”, eclipsing even the 1973 oil crisis triggered by Opec’s oil embargo against countries that supported Israel during the Yom Kippur War.

  Iran’s effective closure of the Strait of Hormuz has highlighted the fragility of the Middle East oil and gas supply chain, and will incentivise import-dependent economies to pursue greater energy security.

  There are already signs around the world that this is taking place in a range of ways, including developing domestic fossil fuel reserves, accelerating nuclear projects, and investing in renewables and battery storage.

  At the same time, high oil and gas prices are spurring fossil fuel producers to increase investment in boosting output and protecting export routes, as they seek to maximise profits amid reduced global supplies.

  The oil price shocks of the 1970s shaped key oil and gas partnerships between Saudi Arabia and the US, and helped drive the development of strategic petroleum reserves, energy-efficiency policies and broader efforts to diversify energy supply.

  In a similar way, the current crisis is dramatically reshaping the global energy landscape, potentially eroding some of the key agreements that emerged in the 1970s and accelerating a new wave of diversification.

  Unparalleled crisis

  The scale of the current energy crisis is unprecedented, with global markets losing 11 million barrels a day (b/d) of oil supply due to the effective closure of the Strait of Hormuz.

  On top of this, 20% of the world’s LNG production cannot be shipped.

  This combined drop in available oil and gas is far larger than during the price shocks of the 1970s.

  In the 1973 crisis, the world lost around 5 million b/d of oil; the same was true of the second shock in 1979, following the Iranian Revolution.

  Deepening the current crisis, significant damage is being inflicted on oil and gas infrastructure across the Middle East, which is likely to take years to repair.

  Refineries have been attacked across the region, including in Iran, Kuwait, Bahrain and Saudi Arabia. There have also been multiple strikes on storage facilities, oil fields, gas processing facilities and shipping terminals.

  While the price shocks of the 1970s led to a global recession and had sweeping, long-term consequences for businesses and consumers worldwide, the latest crisis has the potential to be even more severe and is already causing major disruption in energy markets.

  Advisory firm Oxford Economics has forecast that, if the war is prolonged and the Strait of Hormuz remains closed for between three and six months, the result would be a global recession and world GDP growth would slow to 1.4% in 2026.

  Demand destruction

  Experts say the war is already driving oil and gas “demand destruction”, as governments, companies and households respond to price spikes and supply-chain fragility by reducing reliance on hydrocarbon imports.

  Decisions being made now to reorient away from oil and gas could have a lasting impact on future import demand worldwide.

  Even though it is less than two months since the war started, choices are already being made that could reduce demand for oil and gas in the years ahead.

  In Vietnam, conglomerate Vingroup has asked the government to allow it to replace a planned $6bn liquefied natural gas (LNG) power project – which would have been the country’s largest – with a renewable energy project, citing surging fuel prices linked to the Middle East conflict.

  Similarly, in New Zealand, plans to develop a new LNG import terminal on the country’s North Island are becoming increasingly uncertain. On 30 March, Prime Minister Christopher Luxon said the government would only approve the project if the business case stacked up, and it has been reported that officials are considering replacing it with a large hydroelectric project.

  Christopher Doleman, a gas specialist at the Institute for Energy Economics and Financial Analysis (Ieefa), said: “There were existing concerns about the high price of LNG and potential volatility and these concerns have increased significantly since the war began – leading several developers to consider other options, which in some cases include renewables projects.”

  At a consumer level, demand destruction is also taking place, as high prices for oil- and gas-linked products drive increased sales of solar panels and electric vehicles.

  In March, Octopus Energy, the UK’s largest supplier of domestic electricity and gas, said it had seen a sharp rise in solar panel sales during the price shock, with purchases up 54%.

  Also in the UK, March set a monthly record for electric car sales, with 137,000 vehicles sold — a 14% increase on the same period in 2025. Rising electric vehicle sales were also reported in the US and the EU.

  French used-car dealer Aramisauto said the share of its total sales accounted for by electric vehicles rose from 6.5% to 12.7% within three weeks of the start of the war. In Germany, the share of electric car search queries on the platform mobile.de rose from 12% to 36%, with dealers reporting 66% more enquiries for used electric cars than in February.

  Some Asian countries are also seeing a shift away from gas for cooking. In India, amid an ongoing liquefied petroleum gas shortage, electric stoves have seen a surge in demand, with some retailers reporting they sold three times their usual monthly volume in just a few days.

  The global shift away from fossil fuels — both in major power and import projects and at the consumer level — is likely to have significant long-term implications for energy demand.

  That would fundamentally alter demand forecasts for Middle East producers and could weigh on revenues in the years ahead.

  What we are seeing in the global energy sector is that there are very clear beneficiaries of the ongoing conflict … exporters that aren’t reliant on the Strait of Hormuz can take advantage of high oil prices to post profits and sanction new projects
  Slava Kiryushin, HFW

  Bolstered prospects

  While many Middle East oil and gas producers are seeing their exports severely restricted due to attacks on infrastructure and the disruption of shipments via the Strait of Hormuz, the war is bolstering the prospects of producers in other regions.

  High prices are delivering windfall profits, while investment is flowing towards projects perceived as less exposed to future attacks or a renewed blockade of the strait.

  Over time, these forces could contribute to a global divergence: Middle East producers could miss market-share targets, while suppliers elsewhere outperform.

  Commenting on the implications of the conflict, Slava Kiryushin, an international oil and gas lawyer and partner at London-headquartered law firm HFW, said: “There has already been a massive impact from this conflict on global energy markets. Producers in the GCC have been impacted more than others.

  “The most important factors right now are the damage caused to infrastructure from strikes on energy facilities and how quickly those can be remedied,” he said. “Even if this war ends tomorrow, many will remain concerned about political tensions in the region and the potential for future disruptions.

  “What we are seeing in the global energy sector is that there are very clear beneficiaries of the ongoing conflict … exporters that aren’t reliant on the Strait of Hormuz can take advantage of high oil prices to post profits and sanction new projects.”

  As revenues fall, repair costs rise and projects stall for national oil and gas companies in Saudi Arabia, Qatar, Iraq, Kuwait and Bahrain, companies active in regions including the US, Australia, Russia and Africa are seeing significant benefits.

  Despite Ukrainian strikes on key Russian oil infrastructure, Moscow has reported surging oil revenues as the war in Iran drives up global crude prices and boosts demand for Russian crude.

  In March, Ukraine’s Kyiv School of Economics (KSE) estimated Russia was earning about $760m a day from oil exports, benefitting from high prices and US sanctions waivers.

  Even if the conflict ends in the coming weeks, Russia’s annual oil and gas export revenues are projected to reach $218.5bn this year, up 63% from a scenario in which Middle East energy supplies remain uninterrupted, KSE said. That would amount to an additional $84bn in windfall revenue.

  US oil companies are also seeing bumper profits and higher share prices. Even as the broader US stock market has moved lower, ExxonMobil and Chevron shares have risen by more than 20% since the start of the year.

  Market research firm Rystad Energy has estimated that US oil producers could earn an additional $63bn in profit this year due to elevated prices.

  As producers outside the Middle East record large profits and ramp up output, some analysts argue the region’s future standing in global energy markets could be undermined.

  Commenting on the outlook for Qatari LNG, Doleman said: “Over the long term, the ongoing conflict could weaken Qatar’s bargaining position when the country is negotiating long-term gas contracts due to perceived risk associated with using the Strait of Hormuz.

  “Exports from other suppliers such as producers in the US or Australia could be viewed as more reliable and this could lead to the removal of resale restrictions and other elements that customers in Asia have been pushing back against for some time now.”

  Structural changes

  While uncertainty remains over how the war will end and how extensive future disruptions to energy supplies may be, it is increasingly likely the crisis will bring structural changes to global energy flows.

  There have already been shifts in energy relationships, with clients of GCC oil and gas producers seeking alternative suppliers and sanctions on Iranian and Russian oil being temporarily eased.

  While many of the arrangements made in the short period since the war began are likely to be temporary, some could become more durable over time.

  Iran has made the removal of sanctions one of its key demands to end the conflict with the US and Israel.

  With oil prices remaining high, many countries hit by rising energy costs would welcome the extension of sanctions waivers beyond existing deadlines, to keep crude supplies to global markets as high as possible.

  The scale and permanence of these changes will depend on how quickly the conflict can be resolved, and what assurances can be put in place to prevent it flaring up again.

  If the conflict is resolved quickly, it is possible that oil and gas sectors in Iraq and the GCC could see a significant rebound, returning towards pre-war operations.

  Prior to the war, low production costs in countries such as Saudi Arabia, Kuwait and Iraq made them among the most profitable exporters in the world, and analysts believe that cost advantage will support a recovery once the Strait of Hormuz reopens.

  “Though a lot of damage is being done, Middle East producers still have the advantage of some of the world’s cheapest and easiest-to-produce oil and gas,” Doleman said. “This means they are likely to retain their clients and a functioning business model once the Strait of Hormuz reopens.”

  However, if the conflict continues for an extended period, the prospect of a swift recovery would diminish and more dramatic structural changes to the global oil and gas industry would become more likely.

  That, in turn, could make the Middle East’s future role in global energy markets significantly smaller than previously forecast.

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  Wil Crisp
• 
  Agentic AI comes for the customer journey

  8 April 2026

  The entire architecture of digital commerce rests on one assumption: that a person initiates a transaction – a consumer browses, selects, confirms and pays. Every layer of security, authentication and fraud prevention is calibrated to that sequence.

  Agentic AI, systems that can reason through a complex instruction and plan what needs to happen and act autonomously with minimal human input, disrupts this model at its foundation.

  This is not a hypothetical shift, but one already well on its way to impacting commerce. In the UAE, 70% of consumers already use AI tools when shopping – a 44% increase on 2024 figures, according to Adyen’s 2025 Retail Report. In travel, 68% of UAE consumers used AI to book holidays in 2025 – a 57% year-on-year rise.

  “What makes agentic AI different from the AI tools we’ve seen so far is that it doesn’t just respond or recommend,” says Daumantas Grigaravicius (pictured, right), head of Middle East at Adyen, speaking to MEED. “It can take a complex instruction, reason through it, plan what needs to happen and act autonomously on a user’s behalf.”

  In retail, he says, that means AI agents handling the entire customer journey – discovering products across multiple platforms, comparing prices, applying discounts and completing the purchase – based on a single instruction.

  In hospitality, an agent could plan and book a trip end-to-end, adjusting plans if flight schedules change. In financial services, it could monitor accounts and time international transfers to secure better exchange rates.

  From browsing to delegating

  When AI agents take over the discovery process, the consumer will shift from navigating individual apps and websites to setting preferences that inform how an AI agent acts.

  “The customer journey becomes less about navigating touchpoints and more about setting preferences and letting AI handle execution,” Grigaravicius says. For UAE consumers who already value convenience and efficiency, this is a natural evolution.”

  AI will select products based on data: price, quality metrics, delivery times and sustainability scores – replacing the current advertising, social media and consumer algorithms.

  “This puts pressure on merchants to compete on substance rather than just marketing appeal,” notes Grigaravicius, though there will remain a distinction between the routine and the personal.

  “Consumers will still want to be involved in choices that carry emotional weight,” he says. “What changes is that the mundane, repetitive aspects get automated, which makes the whole process feel far less cluttered and more streamlined.”

  The merchant’s dilemma

  For service providers, the challenge is clear: their offering needs to be easy for AI agents to find; their systems have to connect smoothly; and their value proposition needs to deliver.

  The risk is that if the entire customer journey is contained within a chat interface, merchants could find themselves cut off from the relationship they have spent years building.

  “There’s a real concern that hard-won brands could be reduced to commodities, perhaps just a featureless API endpoint in a bot’s decision-making logic,” says Grigaravicius.

  The industry has confronted versions of this anxiety before. The leap from desktop e-commerce to mobile prompted similar fears of disintermediation.

  “Mobile didn’t replace digital storefronts; it added a powerful, specialised channel for high-intent customers,” he says. “Agentic AI is likely to follow a similar path.”

  One defence is tokenisation. “When an AI agent completes a purchase, the merchant can still recognise the customer through their secure tokenised credentials,” says Grigaravicius.

  “This allows them to apply loyalty benefits, personalise offers and maintain a cohesive relationship across channels.”

  Rethinking identity and fraud

  If AI agents are executing transactions at scale, the security apparatus designed around human behaviour also needs to adapt.

  The traditional fraud-prevention toolkit assumes that personal data alone is sufficient proof of identity, but this assumption weakens when the entity initiating the transaction is an AI agent.

  “The old way of proving identity no longer holds,” says Grigaravicius. The counter is dynamic identification based on patterns of real commercial behaviour – looking at how customers and businesses actually transact, rather than relying on one-off checks that can be faked.

  In principle, AI agents could reduce overall fraud by detecting behavioural anomalies across millions of data points, validating transactions in real time and flagging suspicious patterns before a transaction completes.

  “AI agents don’t fall for phishing emails, don’t share passwords and can’t be socially engineered in the traditional sense,” says Grigaravicius. “So the net effect, if designed correctly, should be a reduction in overall fraud.”

  Liability and standards

  Where a compromised AI agent executes a fraudulent transaction, the chain of responsibility nevertheless needs to be resolved. Grigaravicius argues for a shared model between the AI platform provider, the merchant, the payment processor and the consumer.

  “Where it gets complex is in cases where an AI agent is manipulated through no clear fault of any single party,” he says. “These scenarios require pre-agreed frameworks for liability allocation, which is why industry collaboration on standards is so important.”

  Adyen is a partner of the Google-led Agent Payments Protocol initiative, which includes more than 60 tech and payment firms, and has also joined the Agentic AI Foundation, which aims to bring together companies to shape how autonomous systems interact.

  Two-year horizon

  The next phase – the transition from experimental, single-task agents to collaborative, multi-agent systems managing complex end-to-end processes – is likely to mature within two years, according to Grigaravicius.

  The barriers are structural, with the sector needing robust authentication processes and interoperability across merchant systems, as well as consumer trust.

  For now, the technical talent pool also remains thin. “The demand for people who understand both the commercial and technical dimensions of agentic AI far exceeds what is currently available,” Grigaravicius notes.

  For the Gulf’s service economy, the opportunity is to serve as a proving ground. E-commerce penetration is high, regulatory appetite for fintech innovation is strong and consumer willingness to adopt runs well ahead of global averages.

  The foundational questions – who verifies identity, who bears liability and whether merchants retain autonomy over their own customer relationships – need to be settled before adoption outpaces the infrastructure designed to support it.

  “The rise of agentic AI is not a zero-sum game,” says Grigaravicius. “For agentic AI to become sustainable and profitable, we must build infrastructure that delivers genuine trust, transparency and merchant autonomy – because only that way will we achieve outcomes that benefit all.”

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  John Bambridge
• 
  UAE water investment broadens beyond desalination

  8 April 2026

  

   

  Desalination investment slowed in the UAE last year as awards in the segment fell to $400m, their lowest annual total since 2021.

  Although overall market activity remained strong, reaching $3.4bn in total water sector awards, the only major desalination award in 2025 was the Saadiyat seawater reverse osmosis (SWRO) independent water plant (IWP) being developed by Spain’s Acciona.

  This project accounted for 12% of total awards, reflecting a gradual decline in desalination investment over the past few years.

  In 2024, the segment accounted for 22% of total water infrastructure awards. That figure was 25% in 2023 and 35% in 2022.

  Tasreef programme

  Beyond desalination, the market has been driven largely by transmission infrastructure over the past 12 months, most notably Dubai Municipality’s AED30bn ($8.1bn) Tasreef programme, which aims to strengthen stormwater drainage systems across the emirate for the next century.

  In February, the municipality confirmed it had awarded contracts for five new projects under phase two of the programme to expand and strengthen Dubai’s stormwater drainage network.

  These include two contracts awarded to local firm DeTech Contracting and one to China State Construction Engineering Corporation for stormwater drainage infrastructure. In addition, two consultancy contracts were awarded for the study and design of drainage systems in selected areas across the emirate.

  Cumulatively valued at AED2.5bn, the new projects will serve 30 vital areas, spanning approximately 430 million square metres and supporting an estimated population of three million residents by 2040.

  The latest deals build on an earlier package of projects awarded in April 2025 under phase one of the Tasreef programme. The overall masterplan aims to expand Dubai’s rainwater drainage capacity by 700% by 2033.

  Sewage treatment

  While 2025 was a quiet year for sewage treatment contract awards, 2026 began with a key milestone as Ras Al-Khaimah awarded its first sewage treatment project under a public-private partnership (PPP).

  The contract was awarded to a consortium of Abu Dhabi National Energy Company (Taqa), Saur (France) and Etihad Water & Electricity (UAE).

  The $120m project involves developing a wastewater treatment plant with a capacity of 60,000 cubic metres a day (cm/d), expandable to 150,000 cm/d. 

  The deal is seen as significant not just because it adds capacity, but because it establishes a repeatable template for future private sector participation in municipal infrastructure, a segment that has historically been harder to structure than power or desalination.

  Cooling

  According to MEED Projects, four cooling contracts were awarded last year, with total investment rising from $161m in 2024 to $205m in 2025.

  The segment continues to be led by Empower, which holds more than 80% of Dubai’s district cooling market and operates at least 88 plants across the emirate.

  Dubai Electricity & Water Authority (Dewa) now owns 80% of the company, having recently increased its stake in a $1.4bn deal.

  In February, Empower announced it had begun the design of its fifth district cooling plant in Dubai’s Business Bay, as part of a wider scheme in the area with a total planned capacity of 451,540 refrigeration tonnes (RT).

  The wider Business Bay development comprises nine plants, of which four are already operational and two are currently at the design stage.

  Separately, last August, Empower signed a contract to design a $200m district cooling plant at Dubai Science Park, with a total capacity of 47,000 RT serving 80 buildings.

  Project pipeline

  Looking ahead, the tender pipeline points to sustained market activity, particularly in transmission and wastewater infrastructure.

  A key near-term project is the Dubai Strategic Sewerage Tunnels (DSST) PPP, one of the emirate’s largest planned infrastructure schemes. Contracts for three packages are expected to be awarded in the coming months.

  The masterplan covers the construction of two deep tunnel systems terminating at pump stations serving the Warsan and Jebel Ali sewage treatment plants (STPs). The scheme will convert Dubai’s sewerage network from a pumped system to a gravity-based system, helping the emirate replace ageing pumping stations and meet long-term capacity requirements.

  The main contracts for the J and W packages are expected to be awarded first, with three consortiums in the running, while the Phase 2 Links package is currently under tender, with bids due on 30 June.

  Transmission continues to dominate procurement, led by the tunnels scheme, accounting for $21.7bn under bid evaluation and $2.5bn at main contract bidding stage.

  The wider pipeline also shows growing momentum in treatment, cooling and storage, underlining how investment is increasingly spread across the broader water infrastructure value chain.

  This includes a major dam rehabilitation project in Hatta, covering four dams at Hatta, Ghabra, Al-Khattem and Suhaila, as well as the expansion of the Jebel Ali STP, which will add 100,000 cm/d of treatment capacity.

  Dubai Municipality is also preparing to tender the main construction package for the Warsan STP later this year. While previously expected to be procured as a PPP, the project is now set to move forward as an engineering, procurement and construction (EPC) contract.

  The focus of desalination activity, meanwhile, is on two upcoming projects being procured by Etihad Water & Electricity (EtihadWE). The first of these involves the construction of a $200m SWRO plant in Ras Al-Khaimah, which has already been put out to tender.

  The second involves a $200m SWRO plant in Fujairah, estimated to cost $400m. The request for qualification (RFQ) documents were submitted last year, with the project expected to advance through procurement in the coming months.

  Several desalination projects are also moving through construction, with the Shuweihat 4 IWP due to come online soon with a capacity of 318,225 cm/d, while at least three more plants are scheduled for commissioning next year.

  Large-scale IPPs drive UAE power market

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  Mark Dowdall
• 
  UAE banks ready to weather the storm

  8 April 2026

  

   

  Amid unprecedented turbulent geopolitics, Emirati lenders are putting on a confident face. More than one month in from the Iran conflict, Dubai’s largest bank, Emirates NBD, raised $2.25bn in long-term financing – obtaining, it said, the tightest pricing in the bank’s history for a syndicated loan, which aims to strengthen the bank’s liquidity position.

  Bankers view this as a token of the sector’s resilience. “Strong oversubscription from international lenders, together with tight pricing, reflects continued market confidence in the UAE’s financial sector,” said Shayne Nelson, Emirates NBD’s CEO.

  UAE banks entered the crisis in a strong position. Capital and liquidity buffers are robust, with an aggregate capital adequacy ratio of 17.1% in Q4 2025 – well ahead of the minimum 10.5% level. The loan-to-deposit ratio stood at 77.7%, another metric indicating its latitude to extend ample credit to the economy.

  Performance levels last year were impressive. Total assets in the UAE banking system rose 17% in year-on-year terms to AED5,340bn ($1.45bn) by end-2025. Asset quality ratios improved, supported by a 16.2% reduction in non-performing loans (NPLs). Large banks revealed strong profits. The largest Emirati lender, First Abu Dhabi Bank, reported a 24% increase in net income to AED21.11bn ($5.7bn), while Abu Dhabi Commercial Bank similarly saw full-year pre-tax profits rise by 21% to AED12.8bn.

  Analysts paint a picture of a broadly healthy banking system, at least pre-conflict. “In 2025, we saw some margin pressure, as competition for liquidity increased. UAE banks’ profitability metrics declined a bit. But banks entered this crisis in the best shape for the last 10 years. Take the NPL ratio; at around 3%, it’s been on a declining trend for the last five years,” says Anton Lopatin, senior director, financial institutions at Fitch Ratings.

  Support package

  The events since 28 February have clearly ruffled the surface calm, although the UAE Central Bank has stepped in to provide additional support, announcing on 19 March a resilience package mainly made up of precautionary support measures focused on liquidity and forbearance. This comes amid reports of a sharp decline in liquidity in the banking system.

  The package allows lenders to access liquidity and to use capital buffers to support the economy. Banks enjoy enhanced access to reserve balances up to 30% of the cash reserve requirement.

  “The central bank has a strong ability to support banks in the UAE, as it has AED1tn ($270bn) in external reserves. It means that it is able to provide support if needed, backed by these reserves,” says Lopatin. 

  According to Lopatin, overnight deposits at the Central Bank have declined slightly since the conflict escalated, but nothing too severe. “Judging by liquidity indicators at the sector level, it’s under pressure, but it’s still healthy,” he says.

  Ongoing risks

  Nonetheless, a protracted conflict would raise asset quality concerns, given the likely impact on companies in sectors such as infrastructure, real estate, tourism and aviation – those most exposed to war-related effects. In the UAE, hospitality, tourism and real estate also have weaker links to the sovereign.

  Disruption to air traffic and tourist inflows is likely to have only a small direct impact on UAE banks, whose lending to the transport (mostly aviation) and tourism sectors is limited. Fitch estimates the two combined accounted for less than 3% of total loans at end-2025.

  “The UAE has always been sensitive to the real estate market performance. It has recovered strongly since Covid, with prices up by 60%. But if there is less economic activity, and less belief in Dubai as a safe jurisdiction, real estate would be among the first sectors to suffer,” says Lopatin.

  Corporate real estate accounted for 13% of gross loans at end-2025, down from 20% at end-2021, and this sector is likely to be the main source of new Stage 3 loans if the conflict is prolonged, warned Fitch in a rating note issued on 2nd April.

  Some banks still have high concentrations in their loan books, namely Sharjah Islamic Bank (29%), Ajman Bank (28%), Commercial Bank International (CBI; 41%), Commercial Bank of Dubai (20%) and United Arab Bank (UAB; 20%). Their asset-quality metrics could weaken, said Fitch, adding profitability pressures, if the real estate price correction exceeds its pre-conflict expectations.

  Already, two Dubai property developers have seen their sukuk (Islamic debt securities) fall into distressed territory, as investor concerns about credit quality and refinancing risks start to register. In mid-March, Fitch Ratings placed Dubai real estate firm Binghatti on a negative rating watch, signalling a potential downgrade.

  Too early to assess

  Yet analysts caution against reading too much into this at this stage. “UAE banks’ total exposure to real estate is not so significant,” he says. “Currently, it’s less than 15%, the lowest level in 10-15 years. Any impact on banks will be gradual, but it will be under pressure, so banks will be under pressure too.  Some smaller UAE banks entered this crisis with less cushioning and higher NPLs and therefore could be affected more.”

  Refinancing risk may also affect the government-related entity (GRE) sector, with these anticipating around $11.5bn in debt maturing this year, according to estimates from Capital Economics, a consultancy.    

  If the refinancing of GRE debt proves too expensive, then UAE banks may have to step into the breach with new credit facilities. 

  “The longer the conflict lasts, refinancing becomes a point of stress,” says Lopatin.

  The capacity of the likes of Emirates NBD to raise finance in the most trying conditions suggests a wider resilience that may stave off worst-case scenarios for UAE banks. The next weeks and months will doubtless be testing for them, and the possibility of cash flow problems yielding a worsened loan quality position is one that will be taken seriously. 

  However, the capital and liquidity buffers painstakingly built up since the Covid pandemic mean banks are ready to weather the storm.

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  James Gavin