Moody's estimates UAE lenders have $15bn of exposure to Dubai World

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Banks based in the United Arab Emirates have $15bn of exposure to Dubai World, Moody's estimated in a report yesterday, as the group prepares to present a restructuring proposal to creditors next month.

The rating agency said 12 rated UAE banks and the regional entity of HSBC could probably absorb losses of 40 per cent.

The government denies the likelihood of losses on this scale. Under such a scenario, the lenders would incur losses of about 9 per cent of their capitalisation at the end of 2009, affecting profits but not threatening solvency.