Australian banks calm investors' nerves
The Age
Tuesday December 1, 2009
AUSTRALIA'S bank regulator is believed to have sought further details of the exposure of Australian lenders to Dubai as it prepared for any potential shocks from the debt-heavy emirate.More local banks yesterday moved to reassure investors that they could easily absorb any losses that might arise from a decision by the Dubai Government's investment vehicle Dubai World to delay debt repayment, triggering a possible default.Australia's major banks are believed to have made loans of hundreds of millions of dollars to Dubai World and its operating companies, including ports across Australia.At the weekend, the Australian Prudential Regulation Authority is believed to have sought further information surrounding potential exposure the banks had to Dubai and whether loans were backed by assets.Commonwealth Bank, which is believed to have one of the largest exposures, yesterday confirmed it had loans tied up with Dubai World. However, the bank declined to quantify its position. In a statement, CBA said it did not expect to incur a material loss.Westpac is believed to have less than $100 million in loans tied up with Dubai World, with much of that secured by assets. National Australia Bank and ANZ have also confirmed an exposure, but both have said they do not expect any material losses.
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