GCC Central Banks Bolster Banking Sector Amid Crisis

Apr 9, 2026

69 min

Apr 9, 2026 11:30

How GCC central banks are helping the sector weather crisis with liquidity, policy relief

## Liquidity and Capital Support

Central banks in the Gulf Cooperation Council (GCC) region, including the UAE, Kuwait, and Qatar, have implemented measures to support banks during ongoing geopolitical challenges. These measures focus on enhancing liquidity and easing capital requirements to ensure financial stability.

In the UAE, banks can now access up to 30% of their cash reserves and utilize liquidity facilities in both dirhams and US dollars. Kuwait and Qatar have also reduced liquidity ratios and expanded repo facilities, providing banks with more flexibility to manage short-term funding needs.

## Loan Flexibility and Government Backing

To assist borrowers affected by the conflict, banks in the region are offering loan repayment deferrals. For instance, in Qatar, borrowers can defer payments for up to three months. This helps manage cash-flow pressures and prevents a rise in non-performing loans.

Governments in the GCC are seen as highly supportive, with significant sovereign asset buffers. This financial strength allows them to stabilize the banking system if necessary.

## Resilience and Outlook

Despite the volatile environment, GCC banks have maintained stable deposit levels. The region's banks entered this period with strong capital ratios and low non-performing loans, providing a cushion against potential shocks.

S&P Global Ratings maintains a stable outlook for most GCC banks, reflecting confidence in their ability to withstand current pressures, except for Sharjah Islamic Bank, which faces pre-existing capital challenges.

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