Bank of China is engaged in a legal battle with its former client Nonferrous BM over a series of arbitrage deals conducted in late 1999, reported Asian Wall Street Journal. According to the lawsuits, the bank’s New York branch lent metals trading group Nonferrous BM US$50m in Japanese yen borrowed from its sister bank in Tokyo.
Also named in the suit are the bank’s | Tokyo and Grand Cayman branches and two of its wholly-owned subsidiaries in Hong Kong, which were merged into Bank of China (Hong Kong) last year. Recently, Bank of China was fined US$20m after an investigation into illegal foreign exchange transactions by its New York branch.
Sources close to the bank said that the plans to list its Hong Kong arm were not affected by the case. However, various media commented that the listing, which had been expected in the first part of this year, might now be delayed until the fourth quarter to allow safeguards to be implemented.
Bank of China reported an after-tax profit of Yn7.91bn in 2001, up 2 per cent on the previous year. Its non-performing loan ratio was 27.51 per cent at the end of last year, down 1.13 per cent, according to its annual report.