Portuguese banks have nearly €600 million in exposure to the Middle East

Portuguese banks have nearly €600 million in direct exposure to the Middle East, one of the ten highest in the European Union (EU), according to data released on Monday by the European Banking Authority (EBA).

This exposure stood at €583 million at the end of last year and consisted mainly of loans to households (€290 million), credit and financial institutions (€188 million) and companies (€105 million), the same source details.

The EBA data show an increase of €105 million (22%) compared with June 2025. Portuguese banks have reduced their entire exposure to that region’s public debt, which stood at €27 million at the end of the first half of last year, but increased the credit granted in the second half of 2025.

This loan portfolio accounted for less than 0.5% of EU banks’ total exposure in December, which exceeded €132 billion, according to the EBA.

The European Banking Authority warns that, although exposures “remain limited (just 0.5% of EU banks’ total assets)”, an escalation of tensions could have more adverse knock-on effects, “primarily through higher energy prices, inflationary pressures, weaker global economic growth and disruptions to supply chains”.

“These effects would be particularly felt in energy-intensive sectors, such as transport, construction and certain segments of the manufacturing industry”, it stresses.

French banks were the most exposed, with nearly €61 billion, accounting for almost half of European exposure to the Middle East. Germany and Spain followed, both with over €18 billion, and Italy with €13.7 billion.

For their part, Portuguese banks held €407 million in deposits from households and businesses in that region — although two of those million related to government deposits, which the EBA report does not identify.

According to the EBA, European banks held €99.2 billion in deposits, of which €34 billion were from central banks and €4.5 billion from governments.