|2 December 2009
Three Thai banks have loans extended to firms under Dubai World
In a bid to ease concern over impacts of the debt crisis facing state-operated Dubai World on its performance, three Thai 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, according to state news agency TNA.
Bangkok Bank (BBL) Executive Chairman Kosit Punpiumrat said the bank loaned $50 million (about 1.67 billion baht) to the Dubai World Group Finance Co. It represents only 0.1 percent of the bank’s total assets. At present, the bank’s loan-loss provision stands at over 63.7 billion baht or 112.1 percent 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 percent of the bank’s assets.
In a written clarification, Bank of Ayudhya said it loaned $23 million (about 837.5 million baht) 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 percent 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.
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