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CBA Silence On Dubai World Exposure Deafening
Australian banking major Commonwealth Bank of Australia (CBA) has refused to comment on whether the lender has any exposure to troubled sovereign holding company Dubai World.
The AAP sought comment from CBA on whether the lender had any exposure to either Dubai World or Dubai Commercial Operations Group LLC. In its response a CBA spokesperson said: “It is not appropriate for the Commonwealth Bank to discuss confidential client information”.
The spokesperson refused to make any further comment.
CBA’s deafening silence follows a statement from rival ANZ which said that the lender had no material exposure to Dubai World.
“We work with a number of well established relationships throughout the Middle East but we do not believe there will be any material adverse impacts to these relationships as a result of the moratorium announced by Dubai World,” an ANZ spokesman said.
NAB and Westpac have yet to comment on their exposure to the troubled sovereign holding company.
Global credit ratings agency Fitch downgraded two Dubai government related companies on Friday.
On Friday the ratings agency downgraded the long term credit ratings of the Dubai Electricity and Water Authority, and Dubai Holding Commercial Operations Group from A minus to triple B minus. The ratings agency said that the outlook for the ratings of the two companies were negative.
In its statement, the ratings agency said the two companies “have strong operational and strategic ties with the Dubai government and the downgrades reflect Fitch’s re-assessment of the ability of the Dubai government to support them.”
The downgrades follow reports which suggest that Dubai World a sovereign holding company of the Dubai government was negotiating with creditors to delay debt repayments, whilst its property unit Nakheel wanted a moratorium on a US$3.5 bond due for repayment in less than two weeks.
The threat of a default by the Dubai government sent European equity markets plunging on Thursday, with selling pressure continuing during Asian trade on Friday.
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[...] else has exposure? It seems Austrailian banks have been silent, and silence is spooks. I will be watching this pretty closely, as the rest of the world seems to [...]