November 19, 2007 (LPAC)-- Japan's third-biggest bank, Sumitomo Mitsui Financial Group, had a 59% decline in second-quarter profit, mostly because of continuing losses on U.S. mortgage investments. Net income at the bank fell almost 75 billion yen ($700 million) in the three months ended Sept. 30, from 124 billion yen a year earlier, using figures given by Bloomberg news

In addition, analysts are now expecting that China's third largest bank, the Bank of China (BOC), may have to set aside 7.7 billion yuan ($1 billion) in provisions for U.S. subprime investments in the fourth quarter. The BOC may eventually be forced to triple its subprime charges to 11.3 billion yuan for the full year, a dramatic increase from 3.6 billion yuan in the first three quarters, according to analyst. Showing that its exposure to sub-prime securities was similar to American banks, BOC growth began to slow in the third quarter, beginning with a $322 million writeoff, dropping its profit increase from 51% to 22% in the third quarter. BOC held $7.45 billion in subprime asset-backed securities and $496 million in collateralized debt obligations as of Sept. 30, representing 2.86% and 0.19%, respectively, of its total investment in securities.