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Customers queue to withdraw savings from Bank of East Asia

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by Kay Mitchell

Thousands of customers have been lining up to withdraw their savings from the Bank of East Asia after rumours spread that the bank is facing financial collapse, an allegation which the bank has fiercely denied.

The police have been informed and are investigating after the bank said the rumours were malicious and untruthful and were believed to have been spread via mobile phone.

Following the speculation, the bank’s share price lost 11% as queues formed outside the bank’s branches in Hong Kong.

In a statement, the bank said the management of Bank of East Asia hereby states in the strongest possible terms that such rumours have no basis in fact. The management further confirms that the bank’s financial position is sound and stable.

In addition, the Hong Kong Monetary Authority has rejected the rumours and said the banking system as a whole was ‘safe and sound’ and said these rumours are unfounded.

Last week, the Bank of East Asia announced a trading loss of HK$93 million (£6.5 million) that it says ‘was incurred by a rogue equity derivatives trader who manipulated valuations to hide losses‘.

As a result, the bank was forced to revise down its earnings for the first six months of 2008.

The bank was established in 1918 and is the biggest independent local bank in Hong Kong. At the end of June, it had total consolidated assets of US$50.85 billion (£27.41 billion).

The bank has a workforce of over 10,800 people worldwide and has 60 outlets in mainland China and around 30 more in the United States, Canada and Britain.

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Story link: Customers queue to withdraw savings from Bank of East Asia

News posted: September 24, 2008

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