Global financial crisis on banking stocks

BSE fears: local banks may reportedly suffer losses on their exposure to the US financial giants that collapsed recently.

As per reports, nine of the country's largest commercial banks including State Bank of India (SBI), ICICI Bank and HDFC Bank reportedly have exposure of $420 million (Rs 2,000 crore) in the US financial giants. As per the government, banks other than SBI would suffer losses of Rs 600 crore due to the crisis. SBI alone has exposure of $170 million in Freddie Mac and Fannie Mae. The public sector giant’s exposure in Lehman Brothers is estimated at $17 million.

The estimated losses are due to their ownership of securities sold by Fannie Mae, Freddie Mac, Merrill Lynch & Co., and Lehman Brothers Holding Inc, which have declined in value leading to marked-to-market losses, the report said.