Gulf Banks Tap London And Local Markets As Regulatory Reforms Deepen

Gulf banks are taking advantage of strong investor appetite and a friendlier regulatory environment to issue fresh capital and funding instruments in early 2026, reinforcing their role as anchors of the region’s capital markets while positioning for more cross‑border business with Asia.

The Gulf Capital Market Association’s latest updates highlight a string of notable deals in February. Abu Dhabi’s First Abu Dhabi Bank (FAB) raised 450 million pounds in its third bond issue of the year, pricing a 5.5‑year senior unsecured sterling benchmark at UK gilt yields plus 75 basis points. The bond will list on the London Stock Exchange’s main market, underscoring FAB’s ability to tap deep European pools of capital.​

In Dubai, Mashreqbank priced a 500‑million‑dollar perpetual Additional Tier 1 (AT1) capital security with a 5.5‑year non‑call period at a coupon of 6.25%, following strong investor demand. The Reg S transaction strengthens Mashreq’s capital base and demonstrates continuing appetite for higher‑yielding GCC bank capital from global investors.​

These deals come against a backdrop of broader regulatory and market reforms. Bloomberg’s Gulf Regulatory Outlook 2026 notes that policymakers across the UAE and Saudi Arabia are focused on reducing execution and access frictions, simplifying rules, improving market infrastructure and widening participation. Abu Dhabi Global Market has reaffirmed alignment with IOSCO principles, bolstering investor confidence, while Saudi Arabia’s Capital Market Authority has consulted on scrapping the Qualified Foreign Investor regime for its main market—effectively opening direct access to all foreign investors.

The next frontier, Bloomberg suggests, could be ownership reform, including potential relaxation of Saudi Arabia’s 49% aggregate foreign‑ownership cap on most listed companies. Such changes would deepen free float, boost index weights and make the kingdom more attractive to long‑only global funds.​

On the prudential side, Gulf regulators are tightening Basel III‑aligned frameworks, emphasizing capital strength, governance and financial‑crime controls across banks and insurers. That agenda dovetails with growing issuance of capital instruments like Mashreq’s AT1 and senior debt from top‑tier names like FAB.

International managers are paying attention. GCMA notes that Qatar Investment Authority and Franklin Templeton have launched an equity fund aimed at supporting Qatar’s capital‑market internationalization. Such partnerships bring global expertise into Gulf markets while providing new vehicles for foreign capital to gain exposure to regional growth themes.​

For Asian issuers and investors, Gulf banks’ enhanced capital‑markets activity and regulatory upgrades create both funding and allocation opportunities. Bloomberg reports that Emirates NBD Capital has seen rising demand from Asian borrowers to tap Middle East liquidity via loans and bonds, reflecting the Gulf’s role as a complementary funding base to traditional European and US investors. At the same time, Asian asset managers are increasingly comfortable buying GCC bank paper as part of diversified credit portfolios.

As 2026 progresses, the interplay between regulatory reform, bank capital strategies and cross‑border flows will shape the region’s financial architecture. If Gulf authorities can sustain momentum on transparency and market access while banks maintain robust balance sheets, the GCC’s largest lenders will be well placed to act as regional champions and global counterparties for Asia–Middle East trade and investment.