 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
| . |  |
. |
Bank of China denies subprime worries as trading suspended
Shanghai (AFP) Jan 22, 2008 Trading in Bank of China was suspended here Tuesday pending a major announcement, but the bank denied reports that it would post massive losses over assets linked to US subprime mortgages. The suspension came after Hong Kong media reported China's third-largest bank could announce a significant writedown in 2007 on its 7.95 billion US dollars of investments in subprime-related securities. "It is the largest subprime exposure in Asia. I don't know of any bigger exposure," said Tang Yayun, a Shanghai-based analyst with Northeast Securities. Senior banking regulators have warned Bank of China as well as Industrial and Commercial Bank of China and China Construction Bank would have to make provisions for all their subprime-linked assets, the Hong Kong media said. "It's only the tip of the iceberg," said Tang. "Chinese lenders are really inexperienced in investment in financial derivatives. To be frank, they are liable to be cheated by international investment banks." Late Tuesday, the bank dismissed worries over its bottom line. "The reports were groundless," the bank said in a statement carried by China's official Xinhua news agency. "The bank's after-tax profit continued to grow in 2007, taking into consideration provisions made for subprime-linked assets." Concerns about the fallout from the mortgage default crisis in the United States contributed to a steep plunge in Chinese share prices Tuesday, with the Shanghai Composite Index closing the day down 7.22 percent. "Investor confidence was hit severely by the global slump. People are also worried that the US credit crisis may spread into other countries," said Zhang Gang, an analyst at Southwest Securities. Bank of China stock has slumped since Monday on the newspaper report but the bank said Tuesday it was "not aware of any reasons for such movement" in a statement filed with the Hong Kong Stock Exchange. The Shanghai Stock Exchange did not provide further details regarding Tuesday's suspension. Hong Kong-listed shares of Bank of China fell 0.29 dollars (0.03 US cents) or 8.61 percent to 3.08 on Tuesday after losing 6.39 percent on Monday. Shanghai-listed shares in the bank tumbled 4.14 percent to 6.25 yuan (0.85 US cents) on Monday. Meanwhile the Financial News, a central bank-associated newspaper, warned Chinese banks will see their non-performing loans increase due to the US subprime mortgage crisis and domestic economic cooling measures. "The non-performing loan ratio in the banking industry and risks of volatility in the capital market are both rising," the paper reported, citing Zhong Wei, an economist with Beijing Normal University. The non-performing loan ratio of 16 major commercial lenders fell to 6.7 percent at the end of 2007 from 7.5 percent a year earlier, according to the China Banking Regulatory Commission. Community Email This Article Comment On This Article Related Links The Economy
Walker's World: Coupling and decoupling
Washington (UPI) Jan 16, 2008 Five months ago, when the subprime crisis began to bite, the Asian Development Bank was among the expert institutions that suggested that the U.S. financial troubles would not affect China. The fashionable word of the day was "decoupling." |
|
|
| The content herein, unless otherwise known to be public domain, are Copyright 1995-2007 - SpaceDaily.AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement |
