UCB deposits 'safe' after takeover

PUBLISHED : Sunday, 08 November, 2009, 12:00am
UPDATED : Sunday, 08 November, 2009, 12:00am

Customers of US lender United Commercial Bank have been assured it will be business as usual at its Hong Kong branch following the bank's takeover by East West Bancorp yesterday.

A spokeswoman for the branch, in The Landmark in Queen's Road, Central, said all deposits would continue to be covered by the Deposit Protection Scheme, which guarantees deposits in the city.

She said the branch would re-open as normal tomorrow. The mainland's Banking Regulatory Commission said UCB China, the bank's Shanghai-based subsidiary, had ample liquidity and capital and would operate as usual. It said UCB China had assets of 2.66 billion yuan (HK$3.02 billion) and liabilities of 1.754 billion yuan.

UCB was closed by regulators on Friday and East West announced yesterday it would take over UCB's bank operations, including UCB China.

San Francisco-based United Commercial, with US$11.2 billion in assets, was bought by East West, of Pasadena, California, with the assistance of America's Federal Deposit Insurance Corporation.

As a result of the takeover, East West will receive US$10.4 billion in assets, including US$7.7 billion in loans, and assume US$9.2 billion in liabilities, including US$6.5 billion in UCB deposits.

East West said yesterday that depositors could continue to access their money by writing cheques or using ATM or debit cards.

UCB, highly exposed to the problematic US commercial real estate market, became the 120th US bank to fail this year.