Crisis management for Singapore banks, fund managers in Dubai as conflict sparks anxiety among clients

[SINGAPORE] It has been a week of crisis management and client reassurance for private bankers in Dubai, as Iranian missile strikes tested confidence in the Gulf’s financial hub.

Many fielded calls and text messages from anxious clients on asset safety and contingency plans after Iranian missiles pelted the city over the weekend, according to Singapore-based fund managers and banks that spoke to The Straits Times.

No mass cash withdrawals were reported even as relationship managers at global banks in the Dubai International Financial Centre (DIFC) – host to 500 wealth management firms – received more than their usual volume of calls from high-net-worth individuals seeking reassurance that their money is safe.

Clients asked about contingency plans and shifting funds out of the United Arab Emirates “just in case” the Gulf war escalated, some bankers said.

Dubai is caught in the crossfire between Iran and joint United States-Israel forces after a coordinated strike on Feb 28 killed Iran’s Supreme Leader Ali Khamenei, along with several senior officials.

Within hours, Iran responded with missile and drone strikes targeting US military bases and strategic locations across the Gulf, including airspace over several Gulf Cooperation Council countries, which comprise the United Arab Emirates, Bahrain, Kuwait, Oman, Qatar and Saudi Arabia.

Treasury operations were also disrupted, forcing desks to shift to remote work and implement contingency plans.

Investment banks including Citigroup, Goldman Sachs, JP Morgan, Standard Chartered and UBS have instructed employees to work from home. This is in line with government advice and follows the closure of Dubai’s financial markets on Mar 2 to 3.

Following the two-day closure, Dubai’s benchmark index resumed trading on Mar 4. It ended 4.7 per cent down, marking its worst day since May 2022.

In a notice to its 5,500 registered firms, the DIFC Authority said all regulatory and administrative services would move online from Mar 2 to 4. Employees would work from home under Ramadan business hours, while critical infrastructure such as data centres and the Dubai Financial Services Authority portal remained operational.

BlackRock said its immediate focus was on ensuring staff and clients had the support they needed.

Singapore-based hedge fund manager Dymon Asia Capital held an emergency call with senior executives to plan for a possible escalation.

Still, few were seeing outright panic.

Ranjit Khanna, Bank of Singapore’s (BOS) head of private banking for Europe, Middle East and global South Asia, said that while the situation remained challenging, everyone was calm. BOS is the private banking arm of OCBC Bank.

“At this stage, we have not seen an increase in inquiries from clients on their investments and portfolio allocations. They are closely monitoring market developments but are taking a wait-and-see approach for now,” said Khanna, who is also chief executive of BOS’ DIFC branch.

BOS has two booking centres – Singapore and Hong Kong, he said.

“Our core positioning is firmly rooted in the stability of Singapore and its robust financial and regulatory ecosystem.

“This stability, combined with our extensive global platform, continues to be the cornerstone of our value proposition. We remain committed to supporting our clients through these times and providing them with secure and seamless access to investment opportunities across our key markets,” Khanna added.

London-based Standard Chartered said it, too, is closely monitoring developments, while continuing to work with clients in the Middle East.

The bank declined to comment on specific client activities, but said it remains committed to supporting regional customers “with care and consistency” under existing arrangements, and that its operations are “well positioned” to help clients manage the ensuing market volatility.

DBS Bank, which opened its branch in the Middle East in Dubai at the DIFC in March 2006, has been working with its clients to double down on asset diversification and risk management to mitigate the evolving macroeconomic and geopolitical environment.

“Many of our clients in the Gulf Cooperation Council region have diversified their assets and are holding them across multi-jurisdictions including Asia and, as such, are adopting a wait-and-see approach,” said a spokesperson for Singapore’s largest bank.

The Gulf countries have temporarily closed airspaces, forcing cancellation and diversion of hundreds of flights across the region.

For now, Dubai’s financial system remains fully operational, and officials are moving quickly to reaffirm the city’s stability. But the attacks have dented Dubai’s image as a safe haven for the wealthy, and put on hold fundraising and business ?transactions as dealmakers and bankers curb travel over security concerns.

Henley and Partners, a global residence and citizenship advisory firm, said it is still very early to assess the longer-term implications for wealth flows into other safe havens including Singapore.

It noted that while such events generate uncertainty, they do not automatically trigger structural shifts in capital flows or residency decisions.

“The UAE has, over many years, positioned itself as a stable, well-governed and internationally connected hub. Its infrastructure, institutions and regulatory framework remain fully operational. Historically, the country has demonstrated resilience during periods of regional volatility,” Henley and Partners said.

The advisory firm said “internationally mobile” families typically diversify their residence and citizenship exposure across multiple regions, so they retain flexibility in the face of geopolitical uncertainty.

“These decisions are generally strategic and long-term in nature rather than reactions to short-term events,” it added. THE STRAITS TIMES