Oman banks' Dubai World exposure hits $77m

Omans top banks said on Sunday they had a total exposure of $77 million to troubled conglomerate Dubai World, sending their shares down nearly 6 per cent.

Government-owned Dubai World requested a payment standstill on November 25 for $3.52 billion worth of Islamic bonds maturing this month as it looks to restructure $26 billion worth of debt.

Bank Muscat, Omans largest lender by market value, said on Sunday it had RO19.25 million ($50 million) in exposure to a syndicated loan from the group, the biggest of three exposures, which was still fairly limited compared to other regional and international banks.

Bank Muscat shares closed 6.2 per cent down at 0.77 rials a share, having traded as low as 0.75 riyals earlier on Sunday.

I think Bank Muscats exposure is better than expected, said Adel Nasr, brokerage manager at United Securities in Muscat.

Dubai Holding has a 15 per cent stake in the bank so there were expectations its exposure could be as much as RO50 million.Bank Sohar declined 3.5 per cent after it said its exposure was $4.3 million.

Both Bank Muscat and Bank Sohar said their loans were still being serviced.

National Bank of Oman, the countrys third largest bank fell 5 per cent after it said it had $22.6 million of exposure. Bank Dhofar, Omans second largest bank, jumped 10 per cent on thin volume, after it said it had no exposure.

Oman International Bank and Ahli Bank also said they had no exposure.

Omani bank exposures are minimal compared to the reported $5 billion combined exposure of four British banks.

The Financial Times said last week Royal Bank of Scotland (RBS) was the most exposed with between $1 billion and $2 billion, citing bankers and advisers.

HSBC, Standard Chartered and Lloyds Banking Group had exposure of about $1 billion each, the report said.

In the United Arab Emirates, a senior executive at Abu Dhabi Commercial Bank told Reuters the bank had about $2.18 billion to $2.45 billion of exposure to Dubai World and related entities, while National Bank of Abu Dhabi said it had $345 million in total, the first such disclosure by a major regional lender.

Dubai firms have yet to announce their exposure, although Emirates NBD is reported to have exposure of about $3 billion.

On Friday, Muhammad al-Jasser, governor of the Saudi Arabian Monetary Agency, said Saudi banks had limited exposure to Dubai World.