Hefty charges for bad debt and property revaluation may be the swing factors for the interim results of BOC Hong Kong (Holdings) this week. But all eyes will be on the findings of investigations into the bank's credit approval system and lending exposure to detained Shanghai tycoon Chau Ching-ngai. Analysts predict Hong Kong's second-largest banking group will write off between $2 billion and $3 billion, largely for the decline in the value of its underlying collateral and real estate holdings. Bigger charges will be helped by tighter auditing methods that may have front-loaded some year-end charges to the half-yearly period. BOCHK is expected to post a net profit of between $2.01 billion and $3.47 billion tomorrow, according to eight analysts polled by the South China Morning Post and Thomson Financial. It earned $3.41 billion a year ago. The huge discrepancies among the analysts' estimates are due to the varying provisioning forecast. Analysts expect the bank to post flat loan growth amid squeezed margins, in line with its local peers. A $1.77 billion loan made to Chau's privately owned New Nongkai Global Investments last year was dubbed by analysts as 'going against the grain of sensible and prudent lending practices'. Of the advances extended, about $741 million was still outstanding by June. KPMG will shed light on the bank's overall credit approval, risk management and internal control mechanisms and its loan asset quality, while Moores Rowland will review specifically the lending approval process of the BOCHK loan made to Chau's New Nongkai and any loans relating to Chau. Separately, a special committee appointed by the bank will also reveal its own findings of credit control systems. Chaired by former Securities and Futures Commission chief Anthony Neoh, the high-powered committee has the help from Richard Farrant, a former banking regulator at the Bank of England, acting as a special adviser. Analysts expect a non-event from the review, although they believe it will remove overhangs. 'I would be surprised if the investigation says nothing needed to be changed, but I would also be surprised if it says there were massive gaps in lending practices,' said Keith Irving, head of Merrill Lynch's Asia Pacific Financial Institutions Research. 'We feel that arguably BOCHK has some of the best growth opportunities among the larger local banks because it has relatively under-penetrated in consumer customer base and it also has the ability to take market share.' UBS regional banking analyst John Walde dubbed BOCHK as the most economically sensitive bank in Hong Kong and thus well positioned to take advantage of an economic upturn. 'With a broad segment to the local corporate and small and medium-sized enterprises, [it] reflects Hong Kong's economic conditions more than any other banks,' he said.