A comprehensive analysis by S&P Global indicates that banking institutions across the Gulf Cooperation Council (GCC) region demonstrate varying levels of preparedness for potential financial outflows stemming from geopolitical tensions. According to the latest assessment, banks in the United Arab Emirates, Kuwait, and Oman maintain robust net external asset positions that would enable them to withstand significant deposit withdrawals even under severe geopolitical stress scenarios. Saudi Arabian financial institutions similarly exhibit capacity to endure outflows, notwithstanding their rapidly increasing external debt obligations. The report highlights concerning vulnerabilities in Qatar and Bahrain, where banking sectors face potential funding shortfalls in worst-case conflict scenarios. Bahraini institutions could confront an absolute funding deficit of $1.9 billion by year-end 2025, while Qatari banks may experience a reduced but still substantial $4.4 billion shortfall. S&P maintains an average long-term ‘A-‘ rating for GCC banks, with 95% of outlooks rated stable as of December 2025. The analysis suggests that any credit impact from regional escalation would likely mirror the scale and duration of the June 2025 events when Iran retaliated against American strikes by targeting Qatar’s Al Udeid Air Base. While the region remains vulnerable to external debt outflows during tensions, the UAE banking sector specifically demonstrates exceptional resilience against potential geopolitical upheavals.