KEY POINTS:
Bank of China is expected to make a significant write-down of its investments in US subprime-related securities in the fourth quarter of last year, which could drag down the bank's profit or even send it into the red in 2007, a newspaper said on Monday.
Bank of China, the country's flagship foreign exchange lender, is expected to announce the write-down when it reveals its full-year results in April, the South China Morning Post quoted mainland banking sources as saying.
The bank trimmed its subprime-related securities portfolio to US$7.95 billion ($10.6 billion) in September from U$S9.65 billion in August, it said.
Bank of China made a net profit of 45.5 billion yuan ($8.42 billion) for the first three quarters of 2007 and booked US$322 million for the third quarter to account for its exposure to US subprime mortgaged-backed bonds.
To reflect the depreciation in fair value of the related subprime securities, the lender also set aside US$321 million of reserves against the balance sheet, in said in October.
But banking sources said senior banking regulators had already warned the mainland leadership that Bank of China and two other state banks - the Industrial and Commercial Bank of China and China Construction Bank - would have to make provisions for all of their exposed subprime-related assets, the newspaper said.
Industrial and Commercial Bank had subprime exposure of US$1.23 billion and China Construction Bank had U$S1.06 billion, it added.
- REUTERS
