UAE Banking Industry Reactivates Amid Ceasefire Between US and Iran

Middle East Conflict Eases, But Return to UAE Remains Cautionary

Hours after the US and Iran agreed to a two-week ceasefire, executives from Abu Dhabi funds began to make their way back to the Emirati capital. An executive from one Abu Dhabi fund booked the first flight back to the Emirati capital, while another said they plan to return over the weekend.

However, others were more circumspect, waiting to see if the truce holds. A private banker usually based in Abu Dhabi and a trader at a hedge fund plan to wait out the two-week period before booking flights, while a Dubai-based finance professional is heading back despite being unsure when the war will end.

The divide indicates how employees are trying to balance their desire to return to the United Arab Emirates against lingering security risks, with confidence in a quick rebound tempered by caution over the durability of a truce described by US Vice President JD Vance as "fragile."

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Despite concerns, the UAE has largely remained open, with shops and restaurants operating. However, a few Wall Street firms have temporarily allowed staffers in some cities to work from home or other locations and some offices remain closed.

Analysts have cautioned that significant differences remain between the US and Iran's demands to bring the war to a complete end. "The US has conceded a lot for now, so this requires significant softening of Iranian positions in coming days to avert a resumption of fighting," said Elliot Hentov, chief macro policy strategist at State Street Investment Management.

The region's pull, however, remains strong. Despite a month-long conflict that began after the US and Israel struck Iran on February 28, the bankers' moves hint at the region's allure. The resultant disruption has weighed on the Middle East's status as a tourism and aviation hub, with hundreds of flights canceled.

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The UAE, a global economic hub and magnet for capital and talent, has contended with being a prominent target of Iran's attacks. In the war's early days, some professionals relocated, unnerved by shelter-in-place warnings and frequent interceptions of missiles and drones.

Despite potential disruption to business — as well as to the flow of wealthy individuals and businesses to the UAE — some investors have said the country's infrastructure and governance will help it recover. Registrations at Abu Dhabi's financial center, ADGM, rose 5% year-on-year in March to 284, and a spokesperson said the hub has more than 100 applications in the pipeline.

The country's resilience is likely to be tested in the coming weeks, as the truce takes effect and the region's businesses look to resume normal operations.