BEA net profit plunges 99%
17-02-2009
Bank of East Asia says its 2008 net profit tumbled 99 percent, as it sold off toxic assets at the centre of the global credit crunch. Net profit fell from HK$4.14 billion in 2007 to just HK$39 million last year. "The financial tsunami that swept over the global economy in September 2008 has left a bleak economic landscape in its wake," said chairman David Li. "This has led to a sudden and sharp plunge in new business for local and regional companies and the unprecedented scale of the decline is destined to have a significant impact well into 2009." Net interest income rose from HK$5.98 billion in 2007 to HK$6.79 billion. But the company booked a non-interest loss of HK$336 million compared to a profit of HK$2.84 billion in 2007, after it sold a huge chunk of toxic securities. The bank said in October it expected its 2008 profits to be slashed by HK$3.5 billion after it disposed of its entire portfolio of collateralised debt obligations. In September, savers launched a run on the bank, following the spread of text message rumours that BEA was overexposed to assets linked to collapsed US investment bank Lehman Brothers and troubled insurer AIG. BEA is the first of Hong Kong's major banks to report its 2008 results.
