Dah Sing Banking Group became the latest small to medium-sized local bank to feel the impact of the United States subprime mortgage crisis, posting a HK$1.04 billion write-down that depressed annual profit by 33.1 per cent.
The lender said the impairment charge was made for its leveraged investment and structured investment vehicles (SIV) and represented 67 per cent of its HK$1.56 billion exposure.
Without a business presence in the US, many Hong Kong banks have been exposed indirectly through investments.
Earlier this month, Wing Lung Bank and Chong Hing Bank took subprime mortgage-related provisions totalling HK$963.63 million.
Dah Sing's provision dragged down its net profit to HK$800.17 million last year from HK$1.2 billion in the previous year.
With its investments graded BBB or below, managing director Wong Hon-hing said the group would not rule out the possibility of further write-downs on its remaining HK$518 million exposure to SIVs and leveraged investments.
Mr Wong stressed that the bank did not hold any other investments in collateralised debt obligations or SIVs.
