IBA seeks to put record straight
In an article which appeared in the February 10 edition of the Business Post reporting International Bank of Asia's proposed $800 million capital increase, reference was made to the bank suffering the 'indignity of a bank run'. It also referred to unfounded rumours that IBA was heavily exposed to the stock market. I am sure it was not the intention of the paper to give any credence to those malicious rumours.
IBA has followed a consistent policy of prudent financial management. This is evidenced by IBA's record profits in 1997, reaching $400 million, and by Standard and Poor's recent decision to maintain the original ratings of A-3, BBB following their annual review in December despite the turmoil in Asia and the unfortunate episode of the mini-run in November.
Everyone recognises the rumours were without foundation, and that the prompt action of IBA staff and management, working in concert with dedicated shareholders and government officials prevented serious harm to the financial system. IBA has been commended for its highly professional action.
It is natural that there is a feelings of anxiety in Hong Kong when there is economic and financial crisis throughout the region. IBA is confident about Hong Kong, and this is a feeling which we hold in common with our major shareholders, Arab Banking Corporation and China Everbright. The $800 million increase in capital is concrete proof of commitment and of strength.
MIKE M. MURAD Vice-Chairman and Chief Executive International Bank of Asia
