Austrian lenders set to tackle exposure

Dubai: Austrian banks have an exposure of $1.9 billion (Dh6.97 billion) to the UAE, according to data compiled by the Bank for International Settlements in Basel, Switzerland. Among them is one of Austria's largest banks, Raiffeisen Zentralbank, which took part in loan syndications, mainly involving Dubai World and Nakheel, Wolfgang Penzias, Austria's trade commissioner in the UAE, told Gulf News in an interview Wednesday.

Other lenders, Erste Bank and Unicredit Bank Austria, are said to being exposed too, but they did not reveal their exact figures, as all the banks are citing confidentiality rules.

A spokesman of Raiffeisen only said that the bank is holding a position in a syndicated loan to Dubai World with a debt risk of 30 million euros. Erste Bank said that its claims on borrowers in the Mena region account for 140 million euros, but did not break the numbers down. Unicredit Bank Austria's parent company, Unicredit Spa, based in Italia, said in an official statement that its UAE exposure is "not relevant".

However, according to Penzias, Austrian banks are "certainly affected" by UAE loan exposures. "There must be a reason that they [the banks] are sending restructuring experts down here," he said.

"But it's not only the UAE, there is also a problem with the payment default of Saudi group Algosaibi."

Despite several attempts to get a comment on the debt issue, Nakheel did not respond.

However, Austrian companies remain confident about the economic development in the region. "Dubai has retained its important role as trade and financial hub in the region, especially as many companies look out for new business opportunities in other Gulf countries," Penzias said.