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CCB reveals US$1.06b sub-prime exposure

HONG KONG – China Construction Bank, one of the country’s ‘big four’ state lenders, said it held US $1.062 billion worth of US sub-prime mortgage loan-backed securities at the end of June and expects the securities to have ‘limited impact’ on its operating results for the year.

The exposure is far lower than the US$9.65 billion revealed late last week by another big state-run lender, Bank of China, which sent its shares skidding as much as 8 per cent on Friday before ending 5.4 per cent lower.

China’s biggest bank, Industrial & Commercial Bank of China, on last Thursday said it held US$1.23 billion in US sub-prime-related mortgage-backed securities. It’s shares lost as much as 2.4 per cent on Friday before closing 0.2 per cent higher.

Beijing-controlled China Construction Bank said in its first-half earnings report released late on Sunday that it had set aside 139 million yuan (US$18.37 million) to account for potential losses on its sub-primerelated portfolio, a small amount given its 6.11 trillion yuan in total assets.

 

Source: REUTERS (Business Times 27 Aug 07)

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