Public RelationsAsian banks have little exposure to Dubai: Moody's
Banks across Asia have minimal exposure to Dubai and its debt-laden conglomerate Dubai World, Moody"s Investors Service said.
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Asian banks have lent billions of dollars to entities in the United Arab Emirates, of which Dubai is a part, but these represent a small portion of their assets, the credit rating agency said in statement.
"To date, we have found no Asian bank to have sufficiently high levels of exposure to members of the Dubai World group to warrant any ratings actions," it said.
Moody"s said that even for Asian banks with outstanding loans to state-controlled Dubai World and its entities, their profitability was not expected to be at risk from the group"s plan to freeze repayments.
"Even those banks with the larger exposures to Dubai World firms, could fully provision those exposures and still report a profit for the year," it said.
"In fact, Moody"s believes that the vast majority of Asian banks will not need to set aside more than a couple of weeks" pre-tax pre-provision profits to provision possible losses stemming from the requested standstill and restructuring of Dubai World entities," it said.
The report by Moody"s Investors Service follows a shock announcement last week from Dubai World that it wants to halt payment on its 59-billion-dollar debt for at least six months.
Dubai World accounts for the bulk of the Gulf state"s 80-billion-dollar debt owed to global creditors.