As the Iran conflict extends into its third month, banks in the United Arab Emirates (UAE) are becoming increasingly cautious in their lending practices. Industry executives report a significant decline in new credit approvals, particularly in sectors like real estate, construction, and manufacturing. Some banks have seen lending volumes drop by up to 90%, with one major bank reducing its monthly disbursement from approximately AED 209 million to around AED 30-40 million. The tightening of lending policies reflects a defensive stance by banks in response to geopolitical volatility, despite the UAE banking system being well-capitalized. Businesses, especially those in capital-intensive sectors, are now seeking funding from private lenders at much higher borrowing costs, as traditional financing options dwindle. The increase in provisioning by 52-68% year-on-year indicates banks' precautionary measures against potential financial stress due to the ongoing conflict.