Bank of China’s share price falls

by Richard Kilner

Story link: Bank of China’s share price falls

The Bank of China saw fears over potential subprime-related losses cause its shares to tumble today.

It has been speculated that when the bank reports its 2007 results in April subprime-related losses will see its profits lowered or even wiped out altogether.

The bank has almost $8bn of securities linked to subprime mortgages in the US.

The Bank of China is not only the only Chiense financial institution that may suffer at the hands of the US subprime mortgage crisis.

The Industrial and Commercial Bank of China and China Construction Bank, as well as the Bank of China, have been warned by industry regulators to make provisions for any potential loss incurred from subprime-related securities.

The Bank of China’s Hong Kong share price fell by 4.7% at the start of trading today.

The bank has put aside $322m to cover any losses, though it is unclear precisely how much of a profit the bank will record once any writedowns are taken into account.