Dubai’s Bayan newspaper said HSBC, Standard Chartered, Lloyds Banking Group and Royal Bank of Scotland had agreed to postpone repayment of its debt for a period suitable to Dubai.
Citing unidentified sources, the newspaper said British banks were confident the emirate would be able to pay its debt.
But one of the sources in London said the report did not reflect reality, noting: “It is just too soon”.
The paper also said the banks had asked for more information about interest rates for delayed payments and about the creation of a committee to preserve the value of the company. The paper said the banks would meet later this month.
Standard Chartered, Lloyds and RBS declined to comment. HSBC was not immediately available for comment.
UK banks have the largest exposure to debt problems in Dubai, largely due to Britain’s traditional links to the Middle East, a focus on emerging markets and lending during the property boom.
According to data from the Bank of International Settlements, UK banks have loans totalling $ 50 billion in the United Arab Emirates, out of total loans of $ 123bn by international banks.
