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

The Bank of East Asia

14/06/2019 05:30

(Updates share price)
    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 a profit warning for the six months
ending June 30, hit by a downturn in commercial property markets
outside of China's top-tier cities. 
    Bank of East Asia (BEA), which counts Hong Kong and China as
its main markets, said late Thursday it expected to write down
four loans with a nominal value of HK$6.2 billion ($791.75
million).
    Shares dropped as much as 8.7% in opening trade on Friday to
touch their lowest level in more than three years. By market
break at 0500 GMT, the lender's stock was down 7.9%, while the
broader market  .HSI  slipped 0.3%.       
    The bank said it would take a loss, after tax, of between
HK$2.5 billion and HK$3 billion on the loans. The hit was due to
"worsening market conditions" in the commercial property sector,
the company said. 
    Only BEA and Dah Sing Banking Group  2356.HK  have survived
as smaller 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))