Chinese Banks Duck Subprime Debacle
While western banks took a beating from the subprime debacle, news reports say Chinese lenders are posting profits. Somehow, Chinese stocks have been looking darn good in 2007, despite warnings of a overheating economy or a bubble in the stock markets.
Apparently, financial institutions in China were able to duck the worst of the subprime mess as fee-based services offset losses emanating from the global credit woes linked to weakness in U.S. housing.
Among the sectorwide profit-makers in Bank of China, reporting net profits of a whopping $8 billion last year. And that follows nearly $5 billion in investments in mortgage-backed securities.
Beijing-based ICBC said in a statement, its profits were higher by 65 percent last year. Compared to U.S. and European lenders, the state-lender suffered a mere $1.23 billion from the subprime fallout: "The operational risk management of the bank continued to stand at a prudent level compared to domestic and overseas peers," ICBC was quoted as saying in an Associated Press report.
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