Three Thai banks clarify roles in Dubai World investments

Dubai World investments

In a bid to ease concern over impacts of the debt crisis facing state-operated Dubai World on its performance, three domestic commercial banks on Tuesday admitted they had financially supported companies under the umbrella of the giant corporation, but in quite small amounts compared to their assets.

Bangkok Bank (BBL) Executive Chairman Kosit Punpiumrat said the bank loaned US$50 million (about Bt 1.67 billion) to the Dubai World Group Finance Co.

It represents only 0.1 per cent of the bank’s total assets. At present, the bank’s loan-loss provision stands at over Bt63.7 billion or 112.1 per cent of non-performing loans (NPLs), sufficient for any possible loan loss, he said.

Manager Chaiphat Paitoon of Siam Commercial Bank (SCB)’s Investor Relations Division said SCB had neither extended loans nor invested directly in Dubai World, but had financially supported one hotel project and a housing project of a joint venture company partially owned by a Dubai World subsidiary.

Both projects are operating with sufficient collateral, and the total loan extended to the two projects is less than 0.1% of the bank’s assets.

In a written clarification, Bank of Ayudhya said it loaned $23 million (about Bt 837.5 million) to companies under the Dubai World Group. The loans are due in June 2010 and are in the form of a syndicate investment, equivalent to 0.11 per cent of the bank’s total assets.

To date the Dubai World Group has paid loan interest on schedule, making the latest payment in October and is scheduled to pay the interest next on January 21. (TNA)

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