Banks face $145m exposure to Lehman

Australia's big five banks could have a combined exposure to Wall Street's bankrupt Lehman Brothers Holdings Ltd of around $145 million.
National Australia Bank Ltd's (NAB) $100 million potential maximum exposure is the largest among the group.
The bank's share price closed at its weakest level in more than eight years amid
widespread losses in the banking sector on renewed Wall Street jitters sparked by
the failure of Lehman Brothers, the fourth biggest investment bank in the US.
The country's largest lenders released details of their exposures to Lehman Brothers
after the New York-headquartered bank filed for bankruptcy on Monday.
Among its filings with US Securities and Exchange Commission (SEC), Lehman listed
ANZ Banking Group (ANZ) and NAB as the only Australian institutions with exposure.
ANZ was listed in Lehman's filing as having $US69 million ($A85.3 million) worth of
exposures at as July 2 via two bank loans. NAB was listed with exposures of $28.3
million via two letters of credit.
ANZ said its total exposure to Lehman's group of companies was $148 million with
just $34.6 million to the Lehman holding company that on Monday filed for Chapter 11
Bankruptcy in the US.
The remaining $113 million exposure applies to Lehman's subsidiaries that were not
included in the SEC filing, ANZ said.
The Australian bank said it was too early to quantify its likely loss from is Lehman
exposure.
ANZ's shares finished three per cent lower at $16.36 amid widespread losses across
the banking sector that left only Westpac Banking Corporation edging into positive
territory.
NAB was the worst performer among the major banks, losing over four per cent to
close at $21.90 - its lowest level since April 2000.
The bank's exposure to the Lehman group of companies stood at $100 million including
foreign exchange movements, and was not material, a NAB spokesman said while
declining to specify exposure to Lehman's bankrupt holding company.
NAB's potential exposure of $100 million to Lehman's bankrupt holding company is the
largest of its local competitors after Commonwealth Bank told AAP its $150 million
exposure related entirely to Lehman subsidiaries.
"We have no exposure to the holding company," a CBA spokesman said.
Austock Securities slapped a sell recommendation on NAB on expectations the bank
will book $1.5 billion in bad debt provisions over the next 12 months against its
unhedged credit default swaps, which relate to a basket of global companies that may
include Lehman.
Westpac's total exposure to Lehman was less than $10 million and did not include any
loans, a Westpac spokesman said.
St George Bank, Bendigo and Adelaide Bank, and Babcock and Brown said they had no
exposure to Lehman.
Macquarie Group Ltd said it exposure was "negligible", and it has no material
problem credit or trading exposures to Lehman Brothers.
Prime Minister Kevin Rudd said the global financial crisis still has a long way to
run and the government was supporting a push for greater transparency in global
financial markets, a lack of which had in part gone to the heart of the credit
crunch problem.
The government had also acted to boost liquidity in the Australian economy by
expanding the government bond market to ensure that broader financial markets
operate effectively, Mr Rudd said.
On Tuesday some of Lehman's Asia units suspended their operations and stopped
trading on Hong Kong's equities and futures market exchanges.
Around 130 jobs are on the line at its Australian arm, with local managers still in
talks with its New York headquarters over the bankruptcy process in Australia.