Fri, Feb 07, 2003 - Page 10 News List

Hong Kong banks face poor results as bad loans grow

BLOOMBERG , HONG KONG

Hang Seng Bank Ltd and rival Hong Kong lenders will probably say earnings slid last year, signaling they don't expect a recovery this year as the city grapples with near-record jobless and bankruptcy rates.

Hong Kong's third-biggest bank, a 62 percent-owned unit of HSBC Holdings PLC, will report full-year profit fell 1 percent to HK$10.01 billion (US$1.28 billion), according to the average estimate of seven analysts polled by Bloomberg News. Bank of East Asia will report net income rose 1.5 percent to HK$1.62 billion.

Hong Kong lending fell for a fifth year as borrowers pared debt amid a slump that sent retail sales to their lowest level in nine years. That hurt income at banks, which are struggling to avoid defaults by borrowers.

"The upcoming bank results aren't going to attract investors," said Norman Ho, who manages US$370 million at Value Partners Ltd in Hong Kong. "They will probably paint a picture showing no profit or loan growth and high bad-loan provisions."

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