Bank of East Asia Ltd, Hong Kong's third-largest lender, said operations are "quickly returning to normal" after the bank rejected rumors questioning the company's stability, prompting some customers to withdraw deposits.
BEA shares rose as much as 0.58 percent after rebounding 3.4 percent on Thursday and lines that had formed on Wednesday outside bank branches dried up, suggesting the effort to soothe depositors was succeeding, according to Bloomberg News.
"The Hong Kong Monetary Authority has joined us in unequivocally rejecting these rumors as false and unfounded," Chairman David Li said in an advertisement in the South China Morning Post and Standard newspapers yesterday.
Hong Kong Financial Secretary John Tsang said on Thursday the rumors were "unfounded."
HKMA head Joseph Yam urged depositors to stay calm and pumped liquidity into the city's banking system.
Hong Kong's richest man Li Ka-shing also bought shares in the bank.
(Shanghai Daily September 27, 2008)
Related:
·Depositors calm after HK bank run
The run on Bank of East Asia (BEA) eased yesterday after reassurance from officials and a high-profile tycoon's stock purchase helped soothe panicked depositors.
Fewer people were seen lining up outside the bank's branches on the news that the Hong Kong Monetary Authority (HKMA) injected HK$3.88 billion to the inter-bank market and that Li Ka-shing, the city's richest person, had bought BEA shares.[Full story]
·No panic in BEA's mainland branches
Mainland depositors seemed to have shrugged off the "malicious rumor" that Bank of East Asia is in trouble, but analysts say the turmoil is a reminder to local lenders that a perceived lack of communication can trigger chaos at a time of financial uncertainties.
"There is no sign of irregular cash withdrawal in our mainland branches," said Sun Minjie, executive vice-president of the bank's mainland subsidiary, at a news conference in Shanghai yesterday. "Still, we have increased temporary liquidity just in case."[Full story]
