Banks urged to aid SMEs

Hong Kong's central bank yesterday urged banks to support small- and medium-sized enterprises (SMEs) struggling with financial constraints amid a global financial crisis.

"In recent months, the operating environment for SMEs has become more difficult and many of them are feeling the pain of the global financial crisis," Y K Choi, deputy chief executive of the Hong Kong Monetary Authority (HKMA), said in a statement.

"The HKMA urges all (banks) involved in the provision of credit to SMEs to be as accommodative and flexible as possible to the funding needs of SMEs, within the bounds of prudent credit assessment," he said.

CMB Q3 net up 49.5%

China Merchants Bank (CMB), mainland's sixth-largest lender, said its third-quarter earnings jumped by almost one-half due to loan expansion and higher fee-based income.

The bank's July-September net profits were 5.75 billion yuan under domestic accounting standards, up 49.5 percent from a year earlier.

CMB said it currently held no subprime-related bonds but had $70 million in bonds issued by failed investment bank Lehman Brothers, adding it had set aside $78.04 million of provisions for losses on overseas bond investments.

As of the end of September, it had a capital adequacy ratio of 12.82 percent, well above the 8 percent minimum required by the government.

SMIC's loss widens

Semiconductor Manufacturing International Corp (SMIC), mainland's top contract chip maker, posted yesterday a better-than-forecast quarterly net loss even.

SMIC, which with Taiwan's TSMC and UMC dominate the made-to-order microchip market, said it needed a clearer picture of a tech industry facing a slowing global economy that is in turn taking a toll on spending on computers, cellphones and flat-screen TVs.

Shanghai-based SMIC posted a loss of $30.3 million for the third quarter, compared with a loss of $25.6 million a year earlier. Gross margins dwindled to 7.2 percent in the period, from 10.8 percent in the same 2007 period.

HK dollar steady

The Hong Kong dollar moved in a narrow range yesterday, while some interbank interest rates and Hong Kong dollar forwards rebounded from their morning lows as the stock market pared gains.

The local currency as trading at 7.7527/28 per US dollar at 0900 GMT, little changed from late Tuesday trade in Asia, after shuffling between 7.7525 and 7.7543.

Reuters

(HK Edition 10/30/2008 page2)