HSBC, StanChart have $50 bn exposure to Dubai World: Report

NEW YORK: British banks led by HSBC and Standard Chartered have an exposure of close to USD 50 billion in Dubai's debt worries, which is one of the highest,according to media reports.

Quoting the US-based independent research firm Credit Sights, the Wall Street Journal in its official blog said "the British banks look the most exposed to the Dubai debt worries and HSBC and Standard Chartered are estimated to hold half the British total."

Using data compiled by the Bank for International Settlements, RBS's chief Eurozone economist Jaques Callioux told the WSJ that "the British banks have by far the largest exposure to the UAE at USD 49.5 billion."

"Both HSBC and StanCart had previously expressed concerns about weakness in United Arab Emirate economies and property markets, and both reported higher loan loss impairments in the region in the first half of this year," Credit Sights told the WSJ.

While the direct impact in terms of the potential impairment charges looks "manageable," Credit Sights said the larger problem is likely to be market sentiment and renewed fear over the West Asia woes spreading elsewhere.

In a separate report, the WSJ said quoting people familiar with the matter that "the banks with the greatest exposure to Dubai World are Abu Dhabi Commercial Bank and Emirate NBD PJSC.