China’s H-share banks, specifically the Bank of China, may have exposure to subprime securities, according to a report from Goldman Sachs. The BOC said its losses on subprime investment in the first half would be “insignificant” and that it had less than 10% of its foreign bond investments in mortgage and asset-backed securities at the end of last year. The percentage of that investment in subprime securities was even smaller according to Luo Nan, the bank’s head of investor relations. Subprime losses were reported by banks in Germany and Taiwan earlier in the week.
Subprime Problems May Spread To China