HK-based Bank of East Asia falls over 8% on profit warning

The Bank of East Asia

14/06/2019 03:26

HONG KONG, June 14 (Reuters) - Shares in Hong Kong-based
Bank of East Asia Ltd  0023.HK  fell more than 8% on Friday,
after the lender issued profit warning for a six-month period
ending June 30, dogged by a downturn in some of the company's
businesses in mainland China. 
    Bank of East Asia (BEA), which counts Hong Kong and China as
its main markets, said late Thursday the warning is a result of
an expected downgrade of four loan accounts worth about HK$6.2
billion ($791.75 million) in the mainland.
    Stock dropped as much as 8.7% in the opening trade on Friday
to touch its lowest level in more than three years. As of 0147
GMT, stock was trading down 8.3%, while the broader market
 .HSI  slipped 0.3%.       
    The downgrade of the four loan accounts was due to the
"worsening market conditions" that have affected the commercial
property sector, BEA said. The move was expected to result in
post-tax impairment losses of HK$2.5 billion and HK$3 billion,
the company added. 
    Only BEA and Dah Sing Banking Group  2356.HK  have survived
as independent banks in Hong Kong, a market dominated by HSBC
Holdings PLC  HSBA.L , Bank of China (Hong Kong)  2388.HK  and
Standard Chartered PLC  STAN.L . 
    Deteriorating business conditions have seen several of Hong
Kong's independent banks sold in recent years, such as Wing Hang
bank that was bought by Singapore's OCBC  OCBC.SI  in 2014, and
Chong Hing Bank was acquired in 2013 by Yue Xiu Group, the
trading arm of China's Guangzhou city government. 
       
    ($1 = 7.8308 Hong Kong dollars)

 (Reporting by Sumeet Chatterjee, additional reporting by Alun
John, Editing by Sherry Jacob-Phillips)
 ((sumeet.chatterjee@thomsonreuters.com; +852-2847 2094; Reuters
Messaging: sumeet.chatterjee.thomsonreuters.com@reuters.net))