Aden (South24 Center)

On Monday (March 17), the Central Bank of Yemen in Aden announced that eight commercial banks have officially informed it, via written letters, of their intention to relocate their headquarters from Houthi-held Sanaa to Aden. This move comes amid escalating international pressure on the Iran-backed group, particularly following the US designation of the Houthis as a Foreign Terrorist Organization (FTO).

The move also comes amid the Trump administration’s ongoing large-scale air and naval strikes on Houthi-held areas in Yemen, that have killed 53 people so far and injured around 100 others.

According to the CBY Aden’s statement, these eight banks aim to avoid the potential repercussions of US sanctions, which could include asset freezes and legal actions against financial institutions operating in areas under the Houthi group’s control.

The list of banks includes Tadhamon Bank, Al-Kuraimi Islamic Microfinance Bank, Yemen Bahrain Bank, Yemen Islamic Bank for Finance and Investment, Saba Islamic Bank, Yemen Gulf Bank, Yemen Commercial Bank, and Amal Bank for Microfinance.

These are some of the country’s largest financial institutions, and several have already faced penalties from the Central Bank in Aden. In June 2024, CBY Aden authorities banned banks and exchange outlets from working with unlicensed electronic payment companies as part of efforts to curb the Houthis’ control over the banking sector. 

In April 2024, the Central Bank in Aden had ordered all commercial banks to shift their headquarters from Sanaa to Aden to comply with international anti-money laundering and counter-terrorism financing regulations. Banks were given 60 days to comply.

After the deadline expired, the central bank announced in June 2024 punitive measures against six commercial banks in Sanaa. These measures included suspending the SWIFT system for non-compliant banks. In response, the Houthi-controlled Central Bank branch in Sanaa announced the suspension of 13 banks headquartered in Aden, including two government-owned banks.

Later, the Central Bank in Aden reversed these measures following the intervention of the UN envoy to Yemen, Hans Grundberg. The Yemeni Presidential Leadership Council (PLC) also faced Saudi pressure on this issue, according to a source familiar with the matter who spoke to South24 Center.

Developments this year, including the re-designation of the Houthis as an FTO and US sanctions on Yemen Kuwait Bank, Yemen’s oldest commercial bank, have increased pressure on the banking sector, prompting banks to adopt a more cautious stance.

In January 2025, the US Treasury Department imposed sanctions on Yemen Kuwait Bank for Trade and Investment, accusing it of providing financial support to the Houthi group, including money laundering and transferring funds to their allies, such as Lebanon’s Hezbollah.