Many Chinese financial firms are reducing their exposure to Middle Eastern debt as a widening conflict heightens scrutiny of the Asian country’s extensive lending in the region, Bloomberg News reported on Wednesday, citing people familiar with the matter.
A major bank has taken the rare step of limiting drawdown on a bilateral loan to one of the Abu Dhabi government’s financial entities, the report said, without naming the bank.
Another mid-sized lender is seeking to sell down portions of syndicated loans to Middle Eastern borrowers, including sovereign wealth fund ADQ’s $4 billion facility agreed last year, according to the report.
The Hong Kong Monetary Authority has asked at least two local banks to review their exposure to Middle Eastern loans and bonds, according to the Bloomberg report.
China’s National Financial Regulatory Administration has asked domestic lenders to examine their financing activities in the region, including debt extended to state entities, directing them to report their findings as early as this week, the Bloomberg News report said.
The Hong Kong Monetary Authority and China’s National Financial Regulatory Administration did not immediately reply to a Reuters request for comment.
A Chinese insurer’s asset management arm is also trimming its holdings of sovereign and state-linked bonds from the region, including bonds issued by Saudi Arabian oil giant Aramco, Bloomberg said.
Reuters could not immediately verify the report.
Reuters
