Bank of China disposes of all CDOs

Bank of China<601988><3988>, the Chinese lender with the largest portfolio of subprime-related investments, has disposed of almost all its collateralized debt obligations (CDOs), Chairman Xiao Gang said at the ongoing National People's Congress today.

The Beijing-based lender said earlier it owned US$7.95 billion of subprime securities, of which US$496 million were in the form of CDOs. However, Xiao did not disclose how much subprime-related debt the bank still holds.

Xiao also said its home mortgage loan securities (MBS) have decreased slightly compared with late September.

The third biggest lender in the country has seen its shares sharply drop recently because of losses on its subprime-related investments, although it was quite confident to see the visible profit in 2007.