Asian crisis hits Hong Kong bank
Tuesday 27 January 1998
The Bank of East Asia is the first of Hong Kong's large banks to announce results and analysts believe its performance is likely to be mirrored elsewhere. The bank revealed it had written off almost HK$173m (pounds 13.5m) in bad debts. Provision for bad debts rose almost 20 per cent.
The second half of the year saw a sharp downturn in property loans as the market slowed to a crawl and the constantly rising pressure on interbank rates narrowed the customary healthy profit margin on loans.
However, the bank's chairman, David Li, said the second half of this year would see an improvement. He also forecast lower interest rates, which would aid the ailing stock market.
Meanwhile, NatWest Markets, the UK investment bank, announced it had finally abandoned its attempts to create an Asian equities and corporate finance business.
It is selling its Asian investment banking activities to a joint venture formed by the Chinese state-controlled Industrial and Commercial Bank of China (ICBC) and the Bank of East Asia for an undisclosed sum that represents a small premium to present book value.
In a separate development, Banque National de Paris is close to closing a deal for the purchase of the Hong Kong and China equities business of the collapsed Peregrine group, according to Hong Kong media reports. It is likely Francis Leung, one of Peregrine's founders, will run the restructured business.
Meanwhile, figures yesterday from the Association of Unit Trusts and Investment Funds, showed investors withdrew more than pounds 1.2bn from the Far East after Asian economies collapsed. The crisis caused private investors to shift pounds 406m away from unit trusts in the Far East, while pension fund managers withdrew pounds 820m.
By contrast, private investors poured into corporate bonds and fixed- interest funds. The most popular vehicles were index-tracking funds, which received pounds 1bn of new savings against just pounds 355m in 1996.
- Stephen Vines
- 1 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 2 Does the path to true love really lie in these 36 questions?
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Presidential optical illusion offers clues to how brain processes faces
- 5 Roald Dahl letter warning student to 'eschew beastly adjectives' rediscovered after 35 years
King Salman: Just five days in, Saudi Arabia's new king has already overseen a beheading
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Auschwitz liberation 70th anniversary: Woman sent to three Nazi death camps describes surviving gas chamber
Presidential optical illusion offers clues to how brain processes faces
Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Louise Mensch says 'F**K YOU' in explosive tweets about David Cameron, Saudi Embassy and the Queen over King Abdullah tributes
iJobs Money & Business
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...