Bank blames weakness, turmoil in debt markets
Shares of Bank of East Asia fell to their lowest level in almost two years yesterday after the lender posted a 52.37 per cent slump in first-half earnings and forecast a difficult period ahead for the world economy.
The stock dropped as much as 12.15 per cent after the earnings announcement missed analyst forecasts by a wide margin. It closed down 8.29 per cent at HK$33.20, the lowest since August 2006.
This may be a difficult week for bank profits as the subprime crisis bites deeper. HSBC Holdings on Monday reported a 29.1 per cent slide in net earnings for the first half.
BEA's net profit was HK$894 million, compared with HK$1.88 billion in the first half of last year. Most analysts were expecting earnings to drop between 6.3 per cent and 20 per cent.
David Li Kwok-po, the chairman and chief executive of BEA, cited continuing market weakness as a key reason for the poor results.