GCC commercial-bank assets exceeded $4 trillion in the first half of 2026, extending a multi-year expansion despite regional conflict and market volatility. Deposits grew 6%, faster than overall assets, providing banks with a stronger base for funding credit. UAE data supported the regional trend, with gross credit rising faster than deposits in July as both domestic and foreign lending expanded.

Growth was accompanied by tighter policy and compliance conditions elsewhere in the region. Abu Dhabi Global Market reported a 54% increase in assets under management, reinforcing the UAE’s expansion as a financial centre. Türkiye maintained its policy rate at 37%, while new Iran-related US sanctions against VTB Bank added to the compliance risks surrounding Russia and Iran-related financial flows.

Read more on the week’s key developments.

1. Deposit growth strengthens GCC bank funding amid regional volatility

On 14 September, the GCC Secretariat reported that commercial-bank assets across the six member states increased 3.9% during the first half of 2026 to more than $4 trillion. Assets had risen by around 10% to $3.53 trillion in 2024 and by a further 11.9% to more than $3.9 trillion in 2025. Deposits grew 6% from the end of 2025 to approximately $2.45 trillion. In the UAE, gross credit rose 1.5% in July, compared with a 1.1% increase in deposits. Domestic credit increased 1.4% and foreign credit rose 1.8%, while lending to individuals and companies expanded 2.3% and 1.1%, respectively.

Deposit growth outpaced overall asset growth during the half, giving banks more capacity to fund lending without relying as heavily on wholesale markets, although the effect on margins will depend on deposit pricing and competition for liquidity. GCC central banks also held $829 billion in net foreign assets, equivalent to approximately 11 months of merchandise imports. This was below the $842 billion recorded at the end of 2025 but remained a substantial external buffer during a period of regional conflict and volatile energy markets.

2. Türkiye holds policy rate at 37% as inflation risks persist

On 10 September, the Central Bank of the Republic of Türkiye kept its one-week repo rate unchanged at 37%, marking its fifth consecutive meeting without a change. The central bank said inflation risks remained elevated, citing energy prices and geopolitical developments, and reiterated that it would adjust policy if the inflation outlook diverged materially from its projected path.

The prolonged hold maintains restrictive financing conditions for Turkish banks and borrowers. Elevated policy rates support yields on new loans and securities but also sustain deposit costs and constrain credit affordability and demand. The timing of any future easing will remain dependent on inflation and domestic demand, while banks must manage the repricing of assets and liabilities and borrowers’ ability to service debt.

3. US adds Iran-related sanctions basis against VTB Bank

On 14 September, the US Treasury’s Office of Foreign Assets Control designated Russia’s VTB Bank under an executive order targeting Iran’s financial sector. The Treasury alleged that VTB maintained correspondent relationships with sanctioned Iranian financial institutions, helped move billions of dollars in frozen Iranian assets and supported a settlement mechanism using rial and rouble correspondent accounts. VTB was already subject to US blocking sanctions imposed under Russia-related authorities.

The previous restrictions limit the immediate change for US persons, but the new designation adds an Iran-related legal basis and heightens potential secondary-sanctions exposure for non-US financial institutions involved in certain transactions with the bank. For banks in the Middle East, it increases the compliance sensitivity of payment, correspondent-banking and trade-finance flows involving Russian and Iranian counterparties.

4. ADGM assets under management rise 54%

On 8 September, Abu Dhabi Global Market reported that assets under management increased 54% year on year during the first half of 2026, following 36% growth in 2025. The number of fund and asset managers rose 23% to 190 and the number of funds increased 32% to 276. Financial-services entities grew 27% to 392, while operational entities increased 34% to 3,986. Firms establishing a presence during the half collectively manage more than $2.1 trillion globally, although this does not represent assets held or managed within ADGM itself.

The expansion reinforces Abu Dhabi’s position as a regional centre for asset management and private capital. For banks and other financial institutions, a larger concentration of funds and managers can support demand for custody, administration, financing, treasury and transaction-banking services. It also intensifies competition among regional financial centres seeking to attract international firms and investment mandates.

5. TotalEnergies plans to raise Iraq investment to $16 billion

On 14 September, TotalEnergies Chairman and Chief Executive Patrick Pouyanné met Iraqi Prime Minister Ali al-Zaidi in Paris to review the company’s oil and gas projects. According to the Iraqi Prime Minister’s Media Office, TotalEnergies plans to increase its investment in Iraq from $12 billion to $16 billion. The discussions focused on associated-gas development as Iraq seeks to reduce flaring and dependence on imported gas for electricity generation. The government also outlined its ambition to raise national oil-production capacity to 10 million barrels per day within five years.

The proposed expansion could create project-finance, advisory, trade-finance and infrastructure opportunities for regional and international banks. It would also deepen TotalEnergies’ role in Iraq’s efforts to improve energy security and develop domestic gas supplies. The additional $4 billion remains an investment intention, with the timing, project composition and funding arrangements yet to be announced.

6. FAB sets AED 100 billion blue-finance target

On 8 September, First Abu Dhabi Bank set an AED 100 billion ($27.2 billion) target for water and blue-economy financing between 2026 and 2035. FAB said it became the first bank in the Middle East and North Africa to sign the UN Sustainable Blue Economy Finance Principles. The target covers sustainable water infrastructure, water reuse and related technologies. By the end of the first half of 2026, the bank had facilitated AED 395 billion ($107.6 billion) in sustainable and transition financing, equivalent to 79% of its AED 500 billion ($136.1 billion) target for 2030.

The target directs part of FAB’s existing sustainable-finance commitment toward a sector with substantial infrastructure needs. MENA is the world’s most water-scarce region, while GCC countries remain heavily dependent on energy-intensive desalination. Financing more efficient desalination, wastewater reuse and related technologies could expand FAB’s pipeline across utilities, infrastructure and water technology. The AED 100 billion allocation remains part of its existing AED 500 billion commitment and does not increase the bank’s overall target.

7. Tabby raises $233 million at $6.5 billion valuation

On 14 September, Saudi Arabia-based financial-services platform Tabby raised $233 million in a Series F equity round led by Blue Pool Capital, with participation from Hassana Investment Company, Wellington Management and Arbor Ventures. The transaction valued the company at $6.5 billion. Tabby reported more than $18 billion in annualised transaction volume, 25 million registered users and relationships with over 70,000 businesses. The company said it has been profitable since 2023.

The funding supports Tabby’s expansion beyond buy now, pay later services into a broader range of consumer and business financial products. It has obtained Saudi licences covering larger and longer-term consumer financing and working-capital products, along with a UAE stored-value licence supporting its Tabby Cash account. Longer-duration lending can require more funding and stronger credit-risk controls, increasing the importance of portfolio performance, underwriting discipline and funding diversification as the platform scales.

8. UAE SME protection regulation takes effect

The Central Bank of the UAE’s Small to Medium Sized Enterprises Customer Protection Regulation took effect on 13 September, replacing the SME Market Conduct Regulation introduced in 2021. It applies to licensed banks and finance companies and strengthens requirements covering product disclosures, responsible financing, complaints handling, customer treatment and the information provided before and during a financing relationship.

Banks and finance companies may need to adjust product governance, sales practices, documentation and complaint-resolution processes to meet the new requirements. Greater standardisation may improve transparency and consistency for SME customers, although institutions will also need to manage the associated implementation and compliance costs.

9. QNB and Mastercard launch internationally accepted card in Syria

On 13 September, QNB and Mastercard announced the launch of what they described as Syria’s first locally issued, internationally accepted payment card. The card will allow eligible customers to make payments outside Syria and follows the country’s first international card-acceptance transaction in more than 15 years, completed in August. The initial rollout will be phased and controlled.

The launch is an early step toward reconnecting Syrian customers and merchants with international payment networks after years of financial isolation. Broader integration will require supporting acceptance infrastructure, correspondent relationships and compliance controls. Financial institutions will also need to screen activity against sanctions and restrictions that remain in force despite changes to parts of the international sanctions framework.

10. KIB completes $500 million inaugural senior sukuk

On 10 September, Kuwait International Bank completed the issuance and settlement of its inaugural $500 million senior unsecured sukuk. The five-year instrument was issued at par with a profit rate of 5.502% and matures on 10 September 2031. Investor orders reached approximately $1.2 billion, or 2.4 times the issue size, allowing KIB to tighten the spread by 30 basis points from initial guidance to 95 basis points over five-year US Treasuries. Fitch rated the sukuk ‘A’ with a Stable Outlook.

The level of demand and price tightening gave KIB access to five-year international wholesale funding on improved terms from its initial guidance. The transaction also diversifies its funding sources and establishes a pricing reference for further issuance under the bank’s $1.5 billion trust certificate programme.

What to watch
The US Federal Reserve’s policy decision on 16 September, the Central Bank of the Republic of Türkiye’s September meeting summary on 17 September and its next Monetary Policy Committee meeting on 22 October.