ICBC said to be preparing for subprime losses

Industrial and Commercial Bank of China (ICBC) has set aside reserves sufficient to write off losses amounting to 30% of its US$1.2 billion in subprime holdings, AP reported, citing state media. Jiang Jianqing, ICBC chairman, disclosed the figures at a weekend meeting, explaining that reserves had been increased following warnings of a possible deterioration in the subprime crisis. China’s state banks are thought to hold a relatively small amount in subprime bonds and have so far been untouched by the US credit crisis. Bank of China is believed to hold the most in subprime debt – US$7.95 billion – but it has yet to provide details on the status of this debt. It was reported that China Construction Bank had set aside reserves equal to 40% of its US$1 billion in subprime holdings to cover possible losses.