Dubai World Loan Restructuring: RBS & HSBC Are The Major Lenders

According to a JPMorgan (NYSE: JPM) report released today, the Royal Bank of Scotland (NYSE: RBS), the largest UK government controlled bank, arranged $2.3 Billion or 17% of the total Dubai World loans. The report also said that HSBC (NYSE: HCS) has the largest absolute exposure in U.A.E., with $17 billion of loans in 2008.

According to a report released in Bloomberg Press, Abu Dhabi Commercial Bank PJSC may be owed $1.9 billion by Dubai World, making it the largest creditor outside the emirate. The Bloomberg report, citing a report from RBS, also said British banks have the most to lose among international lenders from a crisis in the United Arab Emirates, with a combined $49.5 billion of loans outstanding. Standard Chartered bank has also got some exposure due through Istithmar PJSC. Barclays Bank & Credit Suisse have said they do not have major exposure in the Dubai World.

HSBC dropped 7.1 percent in Hong Kong, the most since March 9, and was 1.2 percent lower in London, extending a 4.8 percent slide yesterday. Standard Chartered slid 8.6 percent in Hong Kong and 0.9 percent in London after yesterday’s 5.8 percent decline.

Japanese banks are also hit by the financial turmoil in Dubai. Sumitomo Mitsui Financial Group Inc., Japan’s second- largest bank by market value, may be owed at least $225 million by Dubai World, according to people familiar with the matter. People in the industry are expecting that smaller rival Mizuho Financial Group Inc. may be owed about $100 million.