Financial Secretary's Statement on International Bank of Asia

Following is the transcript by the Financial Secretary, Mr Donald Tsang, after attending this morning's (Tuesday) Exco meeting:

Mr Tsang: IBA (International Bank of Asia) has experienced an unusual level of deposit withdrawal in the last day or so predominantly by small depositors who are concerned about their deposits. This is the direct result of a number of wholly unfounded and malicious rumours that have been spread about this institution.

The Hong Kong Monetary Authority and myself have already made clear, IBA is a well-managed and well-capitalised banking institution with a long history in Hong Kong and a long-term commitment to Hong Kong. The major shareholders have also demonstrated their commitment to support the bank.

I have already said that the Exchange Fund is prepared to provide liquidity support to IBA. As I have full confidence in the financial soundness of IBA I now go further, the Exchange Fund stands squarely behind this institution and will provide all the necessary financial support it may require to meet its obligations for as long as is necessary.

As we know, rumour-mongers serve their own selfish purposes. They are not acting in the interest of all of us. We have very sound fundamentals in Hong Kong, and I'm quite sure we have the determination and strength to overcome this difficulty.

Tuesday, 11 November 1997