Cross-strait ties wash out Fubon's bad tidings
Local lenders are not out of the woods yet. Fubon Bank (Hong Kong) has just announced the first profit warning of the season.
The Taiwanese bank said yesterday it expected net profit to be substantially below that of last year. That doesn't sound good, because last year it dropped 78 per cent to HK$100 million.
Impairment is the culprit. The bank had to repurchase HK$313 million of Lehman Brothers minibonds and also had some unspecified impaired loans to be charged in the second half.
Last month, Fubon appointed a new chief executive, Thomas Liang Pei-hwa, to replace Lee Jin-yi, who had been in the post for more than five years.
However, the provision factor is being offset somewhat by warmer cross-strait relationships. Shares of Fubon are up 51 per cent so far this year, the same as the Hang Seng Index.
