Novo Banco is abruptly shutting down hundreds of expat accounts across Portugal — including fully documented legal residents — with no prior notice, no clear explanation, and no easy way to get your money back. Here's what's happening and how to protect yourself before it happens to you.
In late July 2026, a thread on r/PortugalExpats went viral. Posted by an ARI (Golden Visa) holder from Faro, it described something that has since been confirmed by dozens of people: Novo Banco is mass-closing foreign resident accounts, seemingly at random, with no warning and no functional complaint channel.
"I visited a Novo Banco branch, provided all requested documents, and was assured everything was in order. Shortly afterward, the account was closed and my money became inaccessible. I was left unable to pay basic bills such as EDP electricity."
The thread attracted 69 comments and dozens of similar stories. This is not a one-off — it's a pattern affecting hundreds, possibly thousands of accounts.
The timing is not coincidental. In April 2026, Novo Banco was fully acquired by a French banking group (BPCE). The new ownership triggered an aggressive internal KYC (Know Your Customer) compliance review. Banks changing ownership typically tighten their risk policies — and foreign residents are disproportionately flagged as "higher risk" under standard AML frameworks.
💡 Context: Novo Banco was born from the collapse of Banco Espírito Santo in 2014. It carries a history of operational chaos and has now changed ownership again — doubling the compliance pressure on accounts it considers marginal.
Importantly, the KYC crackdown isn't limited to Novo Banco. Similar stories are emerging at Bankinter, Abanca, and other Portuguese retail banks. The trigger: EU-wide pressure to clean up AML compliance, combined with new ownership's lower risk tolerance for non-residents and foreign nationals.
Account closures happen at banks. What's genuinely alarming here is the aftermath. Multiple users report:
"They had been asking for the same information over and over for two years. I always answered. Then they just closed it with no notice. I'm still fighting to get my money back."
One user had a mortgage collected through their Novo Banco account. Another collects rental income through it. Being locked out doesn't just mean inconvenience — it means missed payments, potential defaults, and credit damage.
| Bank | Type | Expat Stability | Notes |
|---|---|---|---|
| Novo Banco | Traditional | ⚠️ Avoid | Mass closures July-Sept 2026, new French ownership |
| Caixa Geral de Depósitos (CGD) | State-owned | ✅ Most stable | State-backed, best KYC communication per Reddit consensus |
| Millennium BCP | Traditional | 🔶 Acceptable | Some KYC hassle but rarely mass closures |
| Revolut (PT IBAN) | Digital | ✅ Flexible | Works for direct debits; don't keep large balances |
| Trade Republic | Digital | ✅ Solid backup | Supports SEPA direct debits and MB references |
| Crédito Agrícola | Traditional | 🔶 Lower fees | Cheaper than major banks, fewer closure reports |
⚠️ Important: Even "safe" banks can freeze accounts temporarily for KYC. The only real protection is never keeping more than 1–2 months of expenses in any single Portuguese bank account.
The single most-upvoted piece of advice in the thread came from u/Yes-Banana-5380:
"Always maintain at least two transaction accounts, and spread any big sums of money around. You never know when you unintentionally trigger an internal rule and it's a pain to sort out."
Practical setup that works for most Portugal expats in 2026:
Never let your Portuguese account hold more than it needs to cover the next 4–6 weeks of local expenses. The rest stays elsewhere.
If you're already locked out, here's the escalation path that has worked for some users:
📌 EU protection: Under the EU Payment Accounts Directive (PAD), banks must give at least 2 months' notice before closing a payment account. If Novo Banco closed your account without adequate notice, you have legal grounds to complain to Banco de Portugal — and potentially seek compensation.
What's happening in Portugal is a local version of a global trend. Banks everywhere are tightening KYC as regulators increase AML pressure. Expats and digital nomads are disproportionately affected because they don't fit the "stable local resident" risk profile that banking compliance models were built around.
The answer isn't to fight the system — it's to stop depending on any single bank for financial continuity. Spread your money. Keep minimums in local accounts. Use digital banks for flexibility. Know your backup plan before you need it.
Find the right combination of accounts to protect your money no matter where you live.
See Our Expat Tools →Sources: r/PortugalExpats thread "Novo Banco is abruptly closing foreign residents' accounts" (July 2026, 69 comments, 48 upvotes); r/ExpatFinance; Banco de Portugal consumer guidelines. This article is for informational purposes only and does not constitute financial or legal advice.