By Thomas Atkins and Matt Smith
Banks' exposure goes beyond loans to include bilateral financing arrangements.
Banks in the UAE face at least $3bn in potential losses from two troubled Saudi family conglomerates, newspaper Emirates Business reported on Thursday, citing unidentified sources.
The banks' exposure goes beyond syndicated loans, the paper said, and includes bilateral financing arrangements built up over the years preceeding the market crash of 2008, the paper said.
Separately, newspaper The National said 88 banks globally face $7.4 billion in exposure to the two firms, citing banking documents.
Topping the list of banks that gave syndicated loans to the two groups are BNP Paribas, with $522.5m, and Citigroup, with $515m, The National said.
Neither regulators nor the troubled borrowers have made public the magnitude of Saudi's credit problems, which revolve around defaults and debt restructurings at the Saad Group and Algosaibi group.
The $3bn exposure alone for the UAE, home to the biggest financial industry in the Gulf, is the highest tally yet for a single country and, if confirmed, would threaten the profitability of the sector in 2009.
The $7.4bn total pricetag for the Saudi credit fiasco is the latest of several reports citing banking documents that to measure the magnitude of the problem, with reports ranging from around $6 billion to $10bn.
The National said more than 10 UAE banks were involved in syndicated loans worth $767.5m to the two groups. (Reuters)