Business activity across the UAE is picking up as fallout from the US-Iran conflict eases, according to Shirish Bhide, Chief Executive Officer of United Arab Bank (UAB), who said corporates and retail customers alike are re-engaging with the bank.
“The country has remained resilient despite being surrounded by regional conflict,” Bhide told Khaleej Times in an interview. “While the UAE itself was not directly involved, the regional situation naturally had an impact for a period of time. However, we’re already seeing signs of recovery.”
“From a business perspective, we’re already seeing customers come back to us looking for expansion, particularly for working capital facilities,” he said, driven partly by supply-chain adjustments and longer shipping times. Personal banking and deposit activity, he added, slowed when the conflict began but are “gradually recovering as well.”
The recovery is especially visible among the bank’s core corporate clients — mid-sized, large and very large corporates — which “have clearly returned to growth,” Bhide said. Beyond working capital, he pointed to renewed opportunities in local capital expenditure financing, transaction banking and supply-chain finance: “Demand across larger corporates is returning.”
Bhide’s comments came as UAB, one of the UAE’s long-established national banks, marked more than five decades in the market. “UAB is now in its 51st year of operation since it was founded in 1975,” he said. “We’re very proud of our history, our legacy and our contribution to more than five decades of growth in this country… our fortunes are tied to the fortunes of the United Arab Emirates.”
The optimism was underpinned by the bank’s half-year results, released last month, which showed net profit of Dh201 million for H1 2026, with second-quarter profit up 68 per cent quarter-on-quarter and 19 per cent year-on-year to Dh126 million, on the back of 13 per cent growth in operating income to Dh421 million. Total assets reached Dh28 billion, up 16 per cent year-on-year, with customer deposits up 16 per cent to Dh18.2 billion and CASA deposits now 40 per cent of the total.
Higher interest rates, Bhide said, cut both ways. “Higher interest rates generally hurt borrowing clients, especially those who are looking at capex/investment plans. For banks, higher interest rates mean higher top line revenue but also higher interest costs on deposits, so on balance banks try to achieve some sort of equilibrium depending on how efficiently they manage the balance sheet and liquidity.
“Where appropriate, we try to structure solutions that help ease the burden of higher borrowing costs, whether through pricing or repayment structures,” he said, pointing to technology-led solutions too. Market expectations towards the end of 2025 of three rate cuts in 2026 have quickly and significantly changed to possibly one rate hike expectation by the end of 2026, he noted, meaning UAB is preparing for a “higher-for-longer” environment. “In the long run, elevated interest rates do weigh on the economy,” he said, “but it comes down to the quality of the growth you’re achieving.”
On competition from digital banks and fintechs, Bhide said the UAE market still offers “niches and opportunities for banks that understand particular customer segments and serve them well” — pointing to UAB’s loyal base of retail, SME and large private corporate clients.
Looking ahead, Bhide flagged external risks — from regional conflict to oil prices and inflation — but pointed to the bank’s track record through recent real life stress tests, including Covid-19 and the recent conflict. “Our financial performance ultimately reflects our solid strategy and the success of our customers,” he said. “We remain cautiously optimistic.”
That confidence is echoed in the numbers: an NPL ratio of 2.7 per cent, provision coverage of 101 per cent and capital adequacy of 21.1 per cent, all above regulatory requirements, with Moody’s and Fitch both affirming UAB’s ratings this year. “When you put all of that together,” Bhide said, “it gives me a great deal of confidence about the future.”
