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Four Dubai banks have ratings cut | |
(about 5 hours later) | |
The ratings agency Standard & Poor's (S&P) has cut the credit ratings of four Dubai-based banks because of their exposure to the debt-laden Dubai World. | |
The banks are National Bank of Dubai, Dubai Islamic Bank, Mashreqbank and Emirates Bank International. | |
Last week, Dubai World rocked financial markets after asking for a delay on repaying its debt. | |
Fellow ratings agency Fitch has also said that it is considering downgrading ratings on some banks in Dubai. | |
S&P said it had made the decision because of the banks' high exposure to corporate government-related entities, including Dubai World and its subsidiary Nakheel. | |
'Low' government support | |
The agency has also downgraded six companies linked to the Dubai government to junk status. | |
S&P said extraordinary support from the Dubai government seemed "low" after the emirate said it would not guarantee Dubai World's debts. | S&P said extraordinary support from the Dubai government seemed "low" after the emirate said it would not guarantee Dubai World's debts. |
S&P said it was not rating Dubai World or its property arm Nakheel. | S&P said it was not rating Dubai World or its property arm Nakheel. |
It said that under its criteria, a credit standstill - which is what Dubai World had asked for - "is considered a default". | It said that under its criteria, a credit standstill - which is what Dubai World had asked for - "is considered a default". |
The firms downgraded were the ports operator DP World, DIFC Investments, Jebel Ali Free Zone, Dubai Multi Commodities Centre Authority, Dubai Holding Commercial Operations Group and Emaar Properties PJSC. | The firms downgraded were the ports operator DP World, DIFC Investments, Jebel Ali Free Zone, Dubai Multi Commodities Centre Authority, Dubai Holding Commercial Operations Group and Emaar Properties PJSC. |
UK exposure | |
Separately, the Financial Times reported that Britain's banks were Dubai's biggest foreign creditors. | Separately, the Financial Times reported that Britain's banks were Dubai's biggest foreign creditors. |
The report said Royal Bank of Scotland had the biggest exposure, of up to $2bn. | |
HSBC, Standard Chartered and Lloyds Banking Group had exposure of about $1bn each, according to the paper. |
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