Executive Summary

• We see a limited direct impact on the APAC financial sector as a result of the Middle East conflict; none of the institutions that we cover has a major presence in the GCC region.

• While Chinese and Japanese lenders are active in the GCC region, the exposure is small as a percentage of their overall lending; for MUFG for example, UAE+Saudi lending was under $6 bn at Mar-25, and constituted 1.2% of their overseas corporate credit exposure; we estimate that Middle East lending accounts for less than 0.1% of Chinese banks’ total assets.

• We are less concerned about the aircraft lessors as the airlines that they lend to tend to be national carriers / government backed, and so these would receive liquidity support if fleets are grounded for an extended period of time; from a materiality perspective Qatar Airways is BOCAVI’s no.3 client with a 6.3% exposure, FlyDubai is SMBCAC’s no.6 client with a 2.8% exposure, and CDB Aviation sources ~6% of its lease revenues from Gulf carriers.