Chinese banks admit to subprime exposure

Calcutta News.Net
Friday 24th August, 2007

Three of Asia's biggest banks, including state-run giant Bank of China, have revealed bigger than expected exposure to the U.S subprime mortgage crisis.

The news has prompted fears that Asian banks, regarded as risk averse after the Asian financial crisis, are not as immune as investors had hoped from the subprime meltdown.

Bank of China and its BOC Hong Kong arm reported a combined US$11.25 billion in subprime-related holdings late on Thursday, while Singapore's DBS Holdings Group Holdings acknowledged it had US$1.6 billion in holdings of collateralised debt obligations, nearly double the exposure it initially declared.

Analysts in the area say the banks' subprime exposure is contained and manageable although its share price had dropped by close of trade on Friday.

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