The cash withdrawal by Bank of East Asia (BEA)'s depositors is unlikely to spread as the banking system in Hong Kong is sound, bankers said.

Jittery depositors yesterday rushed to BEA branches throughout the city for withdrawal of their deposits and created quite a spectacle with a long queue outside each gleaming office.

Stanley Wong, an executive director at ICBC (Asia), said that individual case would not threaten the depositors' confidence to put their money in banks.

"I don't know much about what happened to BEA, but certain news may prompt people to withdraw their money," he said.

Local banks' withdrawal demand was as normal. Spokespersons of Hang Seng Bank, Bank of China (Hong Kong) and Standard Chartered Bank said the operations at their branches were just normal and there was no need to extend the office hours.

Wong noted that the banking system in Hong Kong is sound and the SAR has a good regulatory policy. "In terms of the liquidity and capital adequacy condition, Hong Kong banks are still good," Wong added.

The Hong Kong Monetary Authority also said that it has well-established mechanisms, such as the discount window and the lender-of-last-resort arrangement, to meet any request for liquidity and stands ready to assist banks if they need liquidity support. And none of them has asked for this so far.

Wong believes that the recent financial turbulences or tsunamis would not substantially affect the Hong Kong banking system. The city's banks have announced their exposures to the financial crisis after the takeover of Bear Stearns and the collapse of Lehman Brothers, Wong added.

Barry Fung, executive director of AEON credit service (Asia) said: "Banks are healthy in Hong Kong. They aren't heavily involved in subprime crisis. Total asset investment related to this only accounted for 0.2 percent. Banks may suffer losses but they won't close down."

(HK Edition 09/25/2008 page2)