UK banks top Dubai creditors list

British banks make up the biggest group of foreign creditors for debt-swamped Dubai World and Royal Bank of Scotland is the most exposed, it was reported today.

RBS is said to have between $1-2bn (€661,430 to €1.32bn) of outstanding lending to the emirate's beleaguered investment firm, according to the Financial Times.

It is understood HSBC, Standard Chartered and Lloyds Banking Group are all exposed to the tune of around $1bn (€661,430) each.

Dubai World is labouring under nearly $60bn (€39.7bn) debts, built up as it expanded its investment empire.

The company's projects include a six-tower hotel-entertainment complex in Las Vegas, Dubai's famous man-made palm tree-shaped islands and Scotland's historic Turnberry golf course.

Dubai has been flooded with credit in recent years, enabling developers to build soaring skyscrapers and luxury residential compounds on man-made islands.

World markets were sent into a spin last week after Dubai World asked for a six-month reprieve from paying creditors, although fears over the potential level of the defaults appear to have receded in recent days.

Much of the UK lending is understood to be focused on parts of the business outside of the debt restructuring, like ports operator DP World.

As a result, of the $26bn ($17.2bn) of the firm's debts due to be restructured, RBS's exposure is believed to be around $700m (€463m) and Standard Chartered's about $350m (€231.5m). This was better than some had feared.

Yesterday, rating's agency Standard & Poor's cut several Dubai entities, including DP World, to "junk" status.

The FT report said a banker with knowledge of the portfolio said that Emirates National Bank of Dubai was the firm's largest creditor, with outstanding loans of around $3bn (€2bn).

Other top lenders are thought to include BNP Paribas, Societe Generale and Calyon.