Asian crisis hits Hong Kong bank
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
In pictures: Saturn images from Cassini probe as it prepares to turn lens towards Earth
Serena Williams apologises after comment that rape victim 'shouldn't have put herself in that position'
New banker bonus boom: Payouts leapt 64% to new record when Chancellor George Osborne cut top-rate tax to 45p in April
'Theres something quite unpleasant going on': Nigel Farage confronted for second time on visit to Scotland
World news in pictures
- 1 Breaking the Silence: In the reality of occupation, there are no Palestinian civilians – only potential terrorists
- 2 Mike Ashley wants blood after last season's trauma at Newcastle - and it won't stop with Derek Llambias
- 3 Richard Nieuwenhuizen death: Six teenagers and 50-year-old father convicted of manslaughter in shocking case of referee killed over a game of football
- 4 Exclusive: Newcastle's star talent-spotter on brink as Joe Kinnear sparks walkout
- 5 Vast methane 'plumes' seen in Arctic ocean as sea ice retreats
iJobs Money & Business
£500 - £600 per day: Orgtel: FX Options Front Office Java / C# Developer - Ba...
£600 - £700 per day: Orgtel: Project Manager - Front Office - Regulatory IT C...
£600 - £750 per day: Orgtel: FATCA Project Manager - Banking - London - £600-...
£550 - £600 per day: Orgtel: Fidessa Analyst / PM - Banking - London - Up to £...