Financial Winners & Losers: HSBC, ING

NEW YORK (TheStreet) -- Echoing a beating in the Asian markets overnight, HSBC(HBC) and Royal Bank of Scotland(RBS)were down significantly at the market close of the shortened trading day on Friday, as a result of their exposure to the Dubai debt crisis. However, the banking sector woes on Friday extended further than the Dubai Effect, with ING Groep(ING) stock being destroyed as a result of a rights offering that was priced at a 53% discount.

Dubai -- which just a few years ago was a global financial industry darling scooping up marquee assets including a big piece of the Nasdaq Stock Market -- announced yesterday that it could not make its schedule of debt payments. HSBC, Standard Chartered(STAN), and the Royal Bank of Scotland (RBS) have the largest exposure to debt linked to the Gulf state, according to banking sector analysis issued on Friday.

RBS was the biggest lender (17%) to Dubai World, the state entity seeking to re-work its loan payback schedule. HSBC is on the hook for $611 million and Standard Chartered another $177, according to Goldman analyst Roy Ramos. HSBC has the largest exposure in the United Arab Emirates region at $17 billion, according to data from the Emirates Banks Association.

Shares in RBS and HSBC were both down to degrees reflective of their exposure to Dubai at the market close on Friday. HSBC shares were down close to 6% -- the shares had lost 7% in Asia yesterday as part of the broad Asian market sell-off after the Dubai announcement. Shares of RBS were down 4.7% at the close. Standard Chartered, with a much more limited exposure to Dubai, actually ended the day in London up 0.4%.

While HSBC and Standard had the largest exposures, the entire banking sector was hurting on Friday, with the financial sector down 2.3%.