China's biggest bank sets aside reserves for possible 30 pc subprime loss
China's biggest bank, Industrial & Commercial Bank of China Ltd, has set aside reserves equal to 30 per cent of its US$1.2 billion in subprime holdings to cover possible losses, a state news agency reported on Monday.
By Agencies |
BEIJING: China's biggest bank, Industrial & Commercial Bank of China Ltd, has set aside reserves equal to 30 per cent of its US$1.2 billion in subprime holdings to cover possible losses, a state news agency reported on Monday.
The report, if confirmed, would be the first indication that Chinese banks, which have so far avoided damage from the US credit crisis, might face problems due to holdings of subprime mortgage securities.
ICBC chairman Jiang Jianqing disclosed the figures at a weekend meeting.
Chinese banks are believed to hold only modest amounts of subprime debt. But financial markets are watching them closely to see how they will be affected.
In January, investors sold Chinese bank shares after a news report that Bank of China, the country's No. 2 lender, might record a loss for 2007 due to subprime problems. Bank of China denied that but has yet to release details on the status of its subprime holdings.
Jiang said ICBC's subprime holdings ``remained stable but risk reserves had been increased in the fourth quarter after supervisory departments issued warnings on possible deterioration of the subprime crisis,'' according to Xinhua.
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Bank of China and ICBC are believed to have China's largest holdings of subprime mortgage debt. ICBC said earlier it holds US$1.2 billion in subprime bonds, while Bank of China said in October it had subprime debt valued at US$7.95 billion.
ICBC says it has 8.6 trillion yuan in assets and reported 22.5 billion yuan in profits for the quarter ending in September.
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