PARIS – Some Asian banks have resumed lending to borrowers in Gulf countries, indicating that they are starting to look past the risk of the conflict in Iran as a lack of deals leaves them with capital to deploy.
Major borrowers, including Qatar National Bank, Boubyan Bank, and Kuwait’s sovereign wealth fund, secured financing in August from Asian banks and other lenders.
Saudi Energy Co, the state-owned utility previously known as Saudi Electricity, has recently been in talks for a US$300 million (S$382 million) loan expected to be anchored by a major Chinese lender, according to a document seen by Bloomberg.
Together the deals total requests for more than US$6.8 billion, though it is unclear how much will ultimately be provided.
Asian banks were the top financiers in the Gulf in 2025, with most of the money flowing to Saudi Arabia and the United Arab Emirates.
The region received more than US$17 billion from Asian lenders, a record high and triple the amount in 2024, according to data compiled by Bloomberg.
Deals came to a standstill after the Iran war broke out, effectively killing what many Asian banks viewed as their next major growth opportunity.
Bankers in Asia now appear willing to tolerate at least some risk associated with the Iran war, especially as the conflict has so far stopped short of the worst-case scenario.
“Banks will continue to lend, but more cautiously and to selected clients,” said Gary Ng, senior economist at Natixis SA.
“Banks also have an incentive to protect the relationships they built in the Gulf.”
Asian lenders are also eager to find places to deploy their cash as the syndicated loan market, excluding Japan, languishes in its deepest slump in 16 years.
Even with the revival in lending to the Gulf, the amount extended by Asian banks in the region is down 72 per cent year-to-date at US$2.3 billion from the same period in 2025, according to data compiled by Bloomberg.
In the Kuwait Investment Authority deal, for example, Asian banks including China Construction Bank and Korea Development Bank accounted for only about 30 per cent of total lending, according to a document seen by Bloomberg News and people familiar with the matter.
By contrast, all 34 banks that contributed to the US$1.5 billion loan in 2025 to Riyad Bank SJSC were Asian.
Saudi Energy, China Construction Bank and Korea Development Bank did not respond to requests for comment.
Despite the tentative movement in recent months, bankers expect Gulf lending to remain limited for now.
Financing is being handled on a case-by-case basis with guidance unchanged from when the conflict started, according to half a dozen bankers familiar with the matter who asked not to be identified because they were discussing internal policies.
“Syndicated loan growth may pick up, but it won’t return to previous levels until stability returns,” said Natixis’ Ng. BLOOMBERG
