APAC Financials: Negligible Middle East Impact
Pramod Shenoi: Head of Asia-Pacific Research, Head of Financials - CreditSights
Karen Wu, CFA: Senior Analyst, Financials - CreditSights
Lim Ze Hao, CFA: Analyst, Financials - CreditSights
Trung Tran: Senior Analyst, APAC Insurance and Middle East Banks - CreditSights
Anika Kiadhra: Analyst, Strategy - CreditSights
02 March 2026
- How minimal GCC exposures shield APAC banks, with Chinese and Japanese lenders maintaining Middle East lending below 1.2% of overseas portfolios.
- What government backing means for aircraft lessors facing Gulf carrier exposures, ensuring liquidity support for grounded fleets.
- Why higher oil prices could trigger inflation concerns and potential rate adjustments across oil-importing economies like India and the Philippines.
- How trade corridor disruptions and elevated freight costs create cascading effects on exporters through vital UAE trans-shipment routes.
- Where gold price rallies from haven demand benefit specialized lenders through improved loan-to-value dynamics and portfolio growth opportunities.
Executive Summary
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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.
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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.
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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.
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