Gulf banks, which have proved resilient since war in the Middle East broke out, could face a domestic deposit outflow of $307 billion if the conflict deepens, according to S&P Global Ratings, Reuters reports.

S&P said it had found no evidence of major outflows of foreign or local funding so far, but cautioned that a prolonged conflict could trigger a flight to quality between banks within the same systems, as well as broader external and local funding exits.

The ratings agency’s base case scenario assumes the most intense phase of the war lasts two to four weeks, though it acknowledged that spillovers and intermittent security incidents could extend beyond that window, it said in a report dated March 16.

Under its hypothetical stress scenario, domestic deposit outflows across the six GCC banking systems could reach $307 billion based on year-end 2025 figures, S&P said.

“Overall, the risk appears manageable,” S&P said.