UAE central bank says financial sector remains resilient amid Iran-Israel-US war

The Central Bank of the United Arab Emirates (UAE) has sought to reassure markets that the country’s banking and financial system remains strong and stable despite heightened regional tensions linked to the ongoing Iran-Israel-US conflict.Banks, financial institutions and insurance companies across the country continue to function normally and are delivering services to customers without disruption, said Khaled Mohamed Balama, the Governor of UAE Central Bank in a statement on March 5.

“Despite the successive geopolitical developments witnessed across the region during this period, the Central Bank and the UAE’s banking and financial sector have consistently demonstrated a strong capacity for resilience, adaptability, and sustained growth,” Balama said in the statement.
The remarks comes after Iranian missile strikes shook confidence in the Gulf’s traditional image as a safe financial haven and triggered concerns among investors, particularly regarding the outlook for the UAE’s business across various sectors.The UAE stock markets declined in early trading on Thursday, March 5, as per Reuters after reopening a day earlier following a two-day suspension prompted by Iranian missile and drone attacks on the country.

Strong capital and liquidity buffers

Highlighting the financial health of the country, the UAE Central Bank Governor said the UAE banking system continues to maintain strong capital and liquidity positions.

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“The capital adequacy ratio currently stands at 17%, while the Liquidity Coverage Ratio exceeds 146.6%, both significantly above the regulatory thresholds recommended by international supervisory bodies and global financial institutions,” he said.

Total assets held by the UAE’s banking and financial sector have exceeded AED 5.42 trillion, reflecting the scale and resilience of financial institutions operating in the country, he added.

Legacy of stability and risk preparedness

The governor noted that the country’s financial system has built a reputation for stability over more than five decades, supported by regulatory oversight and prudent governance.

According to the press note, financial institutions in the UAE have implemented advanced frameworks for risk identification, management and business continuity aligned with international best practices.

Balama said the central bank continues to closely monitor financial stability indicators and conduct regular stress-testing exercises while maintaining a range of prudential and monetary policy tools to safeguard stability and reinforce confidence in the financial system.

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