Monday, November 30, 2009

>Asian banks exposure to Dubai/Middle east (CITI)

Limited exposure for Asian banks – We’ve been gathering feedback from banks
across the region yesterday regarding their exposures to Dubai/Middle East in light
of the debt issues in Dubai. Initial feedback by bank is included in this note. It
appears that most Asian banks have little lending exposure, if any, to Dubai.
Standard Chartered and HSBC would have higher exposure given their operations
in the Middle East. Otherwise, Taiwan financials show up as having some
exposure. We also include a download of syndicated loan exposures specifically to
Dubai World and Nakheel – HSBC and some of the Japanese banks appear more
frequently on the list.

Stan and HSBC – From annual reports, Stan’s corporate loan exposure to the
Middle East was US$14bn at 1H09, equal to 7.6% of group loans and 60% of
equity. HSBC’s loan exposure to UAE was US$15.9bn at 1H09, equal to 1.7% of
group loans and 13% of equity.

Taiwan financials – So far, First, Mega, Sinopac, Chinatrust, Shin Kong, Cathay,
and Taishin have revealed exposures to Dubai/UAE. Exposures among Taiwanese
financials are not entirely surprising as companies have been forced to tap
overseas markets for yield, given the pressures from low interest rates, excess
liquidity, and a tough competitive environment. Thus far, amounts are not that
worrying and represent an earnings hit as opposed to a capital hit. However, the
earnings hit may be more significant for some, especially as their earnings buffer
is not as wide in the first place.

To read full report :- Asian banks