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Net profit of Bank of East Asia plunges 98%

(Xinhua)
Updated: 2009-02-17 20:19

Bank of East Asia (BEA), a major bank in Hong Kong, announced Tuesday that its profit after taxation stood at HK$104 million ($13.4 million) for 2008, 97.5 percent lower than the HK$4,221 million reported in 2007.

Basic earnings per share stood at HK$0.02, compared with HK$2.65 per share in 2007. Return on average assets and return on average equity were 0.01 percent and 0.12 percent, respectively, for the year, BEA said in a statement.

The BEA Board of Directors proposed a final dividend of HK$0.02 per share. The total dividend for 2008, including the interim dividend of HK$0.23 per share, amounts to HK$0.25 per share, a decrease of 84.9 percent over the total dividend paid to shareholders last year.

In celebration of the Bank's 90th Anniversary, the Bank has also announced the bonus issue of one new share for every 10 ordinary shares held.

As of Dec 31, 2008, the BEA Group's total consolidated assets totaled HK$415.3 billion, up 5.4 percent over 2007. Total equity rose to HK$32.5 billion by the end of 2008.

With the continuing deterioration of the credit markets, particularly in the second half of last year, BEA took decisive action in October 2008 to sell or write off its entire collateralized debt obligations (CDOs) holdings, said the bank.

CDOs are complex financial products often linked to US mortgage debt. Their value has collapsed in the past year as US borrowers have struggled to repay loans during a drop in the American housing market and the wider economy.

"We enter 2009 with a clean slate," said David K.P. Li, chairman and chief executive of BEA.

"With the CDO portfolio off our books, we have no further exposure to the troubled assets that continue to weigh on many banks worldwide," he added.

On Tuesday, the shares of BEA bucked the downtrend of the market to end up 2.2 percent at HK$15.90 on bargain hunting, after shedding more than 11 percent over the last four sessions on expectations of the weak result.