BEIJING (Reuters) - China's banking and insurance regulator has started an investigation into Bank of China's (BoC) 3988.HK601988.SS recent loss on a crude oil-linked product, the central bank publication Financial News reported on Tuesday.
The BoC has so far settled more than 80% of the cases involving losses on the investment product, and is self-examining its product design, business strategy and risk control, the regulator was quoted as saying in the report.
BoC declined to comment.
BoC said in late April it had settled trades for its trading product linked to the front-month contract for U.S. West Texas Intermediate crude futures CLc1 at minus $37.63 per barrel, leaving mainly retail investors with losses.
The bank offered to shoulder all losses from the fall into negative territory and compensate up to 20% of investors’ original investments, Reuters reported.
The deal will lead to a total 6 billion-7 billion yuan ($1.84 billion) hit for BoC if all loss-recording investors settle.
BoC’s compensation offer to investors was supported by regulators and its major shareholders, including the government, amid public anger at the losses, Reuters reported.
But disputes pressure remains as many investors insist that the bank should clear the responsibility of the loss at first, and offer more.
By Lusha Zhang, Cheng Leng and Se Young Lee; editing by Jason Neely and Chizu Nomiyama
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