Bankers have tried to stay neutral in the diplomatic fight between Qatar and its neighbors, Saudi Arabia and the United Arab Emirates. Now, they are being forced to choose sides.

In early April, JPMorgan and HSBC executives informally told Qatar officials that their banks could not work on the emirate’s upcoming bond issuance, according to two people familiar with the matter. The reason: It could jeopardise their relationship with the Saudi Arabian government, which was arranging its own bond sale, the people said.