SYDNEY, Nov 6 (Reuters) - Australia's major banks have racked up at least A$890 million ($618 million) in loan exposures to just two local corporate failures, bank disclosures showed on Thursday, helping drag down shares in the country's top lenders.
The disclosures follow the collapse this week of investment firm Allco Finance Group Ltd and child care operator ABC Learning Centres Ltd, which both failed to refinance their debts in the face of the global credit crisis.
Commonwealth Bank of Australia, the nation's second-biggest lender, on Thursday revealed A$170 million in exposure to Allco, adding to a total A$400 million in exposure Westpac Banking Corp has to Allco and ABC.
Australia and New Zealand Banking Group (ANZ), the third-biggest lender, said on Thursday it had a A$182 million exposure to ABC Learning, adding that it would make further adjustments to provisions as required.
The country's top lender, National Australia Bank, said it had loan exposure of about A$140 million to ABC.
NAB also said that although it was not a direct lender to Allco itself, "it is a lender to entities within the group and the implications of the appointments to Allco Finance Group are under consideration."
ABC Learning appointed administrators on Thursday, two days after Allco appointed administrators to run its business after failing to refinance A$147 million ($98 million) of debt.
CBA shares fell 2.9 percent to A$39.80 and NAB dropped 4.6 percent to A$24.70. ANZ, which turned ex-dividend, lost 10.8 percent to A$16.95, while the benchmark S&P/ASX 200 index shed 4.3 percent.
Australian banks have so far largely weathered the sub-prime mortgage crisis and global credit squeeze without too many major problems, unlike their peers in the U.S. and Europe. But their heavy reliance on wholesale funding has hiked their cost of funds and a slowing economy is likely to see more loans turn sour.
Last month NAB reported a quadrupling in bad debt charges and a 28 percent drop in second-half cash profit, while ANZ posted 32 percent drop in second-half cash profit due to higher bad debt charges.

($1=1.443 Australian Dollar)

(Reporting by Denny Thomas and James Regan; Editing by Kim Coghill) Keywords: CBA/ (denny.thomas@reuters.com; +61 2 9373 1812; Reuters Messaging: denny.thomas.reuters.com@reuters.net)

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