Sumitomo Mitsui Banking (SMBC) has reached out to Asian banks backing an around $1.5 billion Saudi loan deal to reconfirm their commitments, an unusual step highlighting the risks the conflict in Iran poses for lending in the region.

SMBC, one of Japan¡¯s largest lenders, started marketing the syndicated facility for Saudi Energy just before the war began, focusing on Asian banks, according to people familiar with the matter. With commitments due by the end of March, the deal underscores the mounting pressure SMBC faces as sole underwriter to sell the loan, even though such deadlines are typically flexible.

SMBC started contacting participating banks, which had already secured internal approvals, as recently as last week to see if they were still on board, said the people, who asked not to be identified discussing private matters. It¡¯s unclear how the banks responded.

Saudi Energy¡¯s transaction is shaping up as a bellwether for Asian banks¡¯ appetite for Middle East exposure, as the 51³Ô¹ÏÍø forces a rethink of regional lending strategies. Several Chinese institutions have already scaled back their exposure to the region, with one major player taking the rare step of restricting drawdowns on a bilateral loan. Lenders in Singapore and elsewhere are also reassessing pipelines and existing exposure to the Gulf.

If participation in the Saudi Energy deal falls short, SMBC could be forced to shoulder a significant portion of the deal itself ¡ª an outcome that would weigh on its balance sheet.

SMBC and Saudi Energy didn¡¯t respond to requests for comment.

Before the war, several Asian banks ¡ª particularly Chinese institutions ¡ª had bet big that Middle East lending would remain a key growth driver for 2026, amid sluggish deal flow and intensifying price competition at home. Loans from Chinese financiers to the region jumped nearly threefold to a record $15.7 billion in 2025, excluding bilateral facilities, with the bulk going into Saudi Arabia and the United Arab Emirates, according to compiled data.

Proceeds from Saudi Energy¡¯s five-year loan will be used for general corporate purposes, the people said.

Formerly known as Saudi Electricity, the company has been expanding and launching new projects to support the country¡¯s ambitions to diversify Saudi Arabia¡¯s energy mix away from crude oil.