Large HK banks under audit scrutiny

Hong Kong News.Net
Saturday 21st July, 2007

An audit report has found problems at three top banks in Hong Kong.

China's auditors have found more than US$1.2 billion in problem loans which highlight poor credit practices in the financial system.

The questionable loans were found at three of the nation's largest lenders, the Bank of China, the Bank of Communications and China Merchants Bank.

The audit found suspect loans that dated back as far as 2002.

According to the auditor's report, the lending largely went to unqualified real estate companies or fraudulent personal mortgages, many being siphoned off into land or stock market investments.

Other irregularities included settlement transactions not conforming to regulations, inadequate oversight of accounts and improper procurement practices.

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