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Chinese Banks May Be Bracing for Subprime Hit
Published: January 22, 2008
Shanghai--The president of the China's sixth-biggest bank said Chinese bank earnings will likely be lower this year because of the government's attempt to slow the economy and the U.S. subprime mortgage crisis, according to The Guardian.
"We have to be very realistic: We are facing many challenges this year which are not only from home but also abroad," China Merchants Bank Co. President Ma Weihua told Reuters Monday.
China Merchants Bank Co. sold the U.S. subprime-related investments it made in 2004 two years later for 13.4 percent returns. However, China's larger, state-owned banks--including the Bank of China--might not fare as well.
Bank of China shares fell 6.4 percent Monday after the South China Morning Post reported the bank may see a 2007 loss due to a significant writedown on billions of dollars of U.S. subprime-related investments.
