The Central Bank of the UAE began a special and urgent examination of Banque Misr’s UAE operations after a proposed US measure threatened to restrict the branches’ correspondent banking access. The UAE and Egyptian central banks subsequently confirmed that they were coordinating their response and that the branches continued to operate normally.

Saudi bank deposits grew faster than private-sector credit in July, while renewed public-debt issuance sharply increased Kuwaiti banks’ government exposure. Qatar’s economy contracted 7% as hydrocarbon output fell, although non-hydrocarbon activity continued to expand.

Read more on the week's key developments:

1. CBUAE and CBE coordinate response over Banque Misr UAE branches

The Central Bank of the UAE (CBUAE) said on 29 August that it had begun a special and urgent examination of Banque Misr’s UAE operations, including a forensic review and an in-depth lookback covering the period and companies identified by US authorities. The CBUAE and Central Bank of Egypt (CBE) issued a joint statement the following day confirming coordination over the branches, which continued to operate normally.

The examination follows a proposal by the US Financial Crimes Enforcement Network (FinCEN) to designate Banque Misr UAE a financial institution of primary money laundering concern. FinCEN alleged that it processed approximately $1.8 billion between January 2024 and June 2026 for 103 companies potentially connected to Iranian shadow-banking networks. If finalised, the measure would prohibit US financial institutions from opening or maintaining correspondent accounts for Banque Misr UAE and require special due diligence to prevent indirect access. It applies only to Banque Misr’s UAE operations. The CBUAE said it was considering its options if the measure is imposed.

2. Saudi bank deposits outpace credit growth in July

The Saudi Central Bank (SAMA) published its July banking statistics on 30 August, showing continued expansion across the banking system. Bank assets increased 7.3% from a year earlier to SAR 5.19 trillion ($1.38 trillion), while deposits rose 8.6% to SAR 3.11 trillion ($829 billion) and private-sector credit increased 5.6% to SAR 3.27 trillion ($872 billion). Banks recorded profits of SAR 8.52 billion ($2.27 billion) during the month.

Deposit growth running ahead of private-sector credit growth is particularly relevant to Saudi banks’ funding position following a period in which rapid lending expansion increased competition for deposits. The difference between deposit growth of 8.6% and credit growth of 5.6% indicates stronger funding growth during July, although one month does not establish a sustained easing in funding pressures.

3. Kuwaiti banks’ government exposure rises following renewed public-debt issuance

The Central Bank of Kuwait (CBK) published its July banking statistics on 26 August, showing resident credit increasing 4.8% from a year earlier and deposits rising 9.8%. Banks’ claims on the government increased 276.7% to KWD 4.61 billion ($15.1 billion), driven by higher holdings of local- and foreign-currency public-debt instruments following the 2025 Financing and Liquidity Law.

Government claims accounted for approximately 4.4% of total bank assets, up from about 1.2% a year earlier. Private-sector claims nevertheless grew 5.3% and remained the largest component of bank assets at 49.8%, so the July data do not show meaningful displacement of private-sector lending. Further government issuance would give banks more sovereign instruments to absorb while continuing to change the composition of their domestic assets.

4. Qatar’s economy contracts 7% as hydrocarbon output falls sharply

Qatar’s real GDP contracted 7% from a year earlier in the first quarter of 2026, according to figures released by the National Planning Council on 31 August. The decline was driven by a 25.8% contraction in hydrocarbon GDP amid restrictions affecting regional shipping and exports. By contrast, non-hydrocarbon GDP grew 3.5%, supported by wholesale and retail trade, up 9%, construction, up 6.2%, real estate, up 6.1% and financial and insurance activities, up 4.8%.

The figures show a marked divergence between Qatar’s hydrocarbon sector and its domestic non-energy economy. Activity remained positive across trade, construction, real estate and financial services, but the scale of this growth was insufficient to offset the fall in hydrocarbon output.

5. ADIB proposes AED 1.75 billion rights issue to support balance-sheet growth

Abu Dhabi Islamic Bank (ADIB) announced on 25 August that its board had approved a proposal to raise AED 1.75 billion ($476 million) through a rights issue, subject to shareholder and regulatory approvals. The transaction would comprise 106.4 million new shares at AED 16.45 each, a 28.8% discount to the bank’s 24 August closing price. ADIB’s assets reached AED 304 billion ($82.8 billion) in the first half of 2026 after increasing 24% during 2025.

The proposed capital raise would give ADIB additional capacity to support further balance-sheet growth while maintaining capital flexibility. It would also increase the bank’s equity base ahead of further expansion under Vision 2035. The transaction remains subject to shareholder and regulatory approvals.

6. Alpha Dhabi doubles private-credit commitment to $1 billion

Alpha Dhabi Holding announced on 31 August that it will double its capital commitment to the MICAD Credit joint venture managed by Mubadala Capital to $1 billion, while increasing its ownership interest from 20% to 40%. The venture’s mandate will also expand beyond its existing US and European direct-lending activities to additional global private-credit strategies available through Mubadala Capital’s relationships. MICAD Credit currently manages around $1.7 billion across 45 portfolio companies.

Doubling both the commitment and ownership interest materially increases Alpha Dhabi’s exposure to private credit. The broader mandate extends the venture beyond its existing direct-lending strategy, although the partners have not disclosed the timing or allocation of the additional capital.

7. Visa and Mastercard complete first international card transactions in Syria

Visa and Mastercard carried out their first international card transactions in Syria on 26 August. QNB Group said QNB Syria and Mastercard completed an end-to-end international payment using an internationally issued Mastercard at a QNB point-of-sale terminal. Visa separately tested a live international transaction with Fransabank Lebanon and Paymera, a Syrian payment technology company.

The Mastercard implementation and Visa test marked the start of international card acceptance in Syria days after the US removed the country from its list of state sponsors of terrorism. QNB is adding eligible merchants through a phased rollout, while Visa plans to support wider acceptance. Services have not reached nationwide coverage, and Syria’s central bank said broader reintegration still requires stronger correspondent banking links, compliance, governance, risk management, cybersecurity and regulatory oversight.

8. Egypt moves to settle EGP 98.1 billion of NIB legacy obligations

Egypt signed two framework agreements on 26 August to address EGP 98.1 billion ($1.9 billion) in historical debts and financial entanglements involving the National Investment Bank (NIB), the National Media Authority and the New Urban Communities Authority. The agreements form part of a broader government effort to resolve long-standing financial relationships involving NIB, some of which date to the 1980s.

Resolving these legacy obligations can improve transparency around NIB’s financial position by converting long-running inter-government claims into defined settlements. The government has not disclosed the settlement schedule or the effect on NIB’s remaining legacy exposures.

9. Egypt strengthens oversight as consumer finance expands

Egypt’s non-bank financial sector recorded strong growth across several financing activities in the first half of 2026, with consumer finance reaching EGP 71.8 billion ($1.4 billion), up 88.5% from a year earlier, while factoring increased 32.3% and mortgage financing rose 24.9%. Separately, the Financial Regulatory Authority (FRA) on 25 August reinforced customer-verification requirements, including checks on customer identity and mobile-phone ownership and screening against relevant anti-money-laundering lists.

The rapid increase in consumer finance raises the importance of the verification requirements. Under the FRA’s instructions, consumer-finance and MSME lenders must use one-time passwords when contracts are entered into and when financing is used, alongside the identity, mobile-ownership and screening checks. Evidence on identity-related disputes and fraudulent financing following implementation is not yet available.

10. Saudi Arabia proposes regulatory framework for supply-chain finance

The Saudi Central Bank opened consultation on 26 August on draft rules governing supply-chain finance and supply-chain finance intermediation. The proposed framework establishes standards and procedures for these activities as part of SAMA’s efforts to develop the finance sector, support innovative financial services and improve the efficiency of financial transactions with merchants. Stakeholders have 30 days to provide feedback.

The proposal would give supply-chain finance a more defined regulatory framework and establish clearer parameters for providers. It could support wider use of working-capital solutions tied to underlying commercial activity. The scope of eligible providers, risk allocation and operational requirements should become clearer when SAMA publishes the final rules.

What to watch

The Central Bank Payments Conference in Istanbul, under way until 2 September, AIM Congress in Dubai from 7 to 9 September and the Central Bank of Egypt Monetary Policy Committee meeting on 24 September.