Bank of British Columbia Sues Journalists and a Bank Analyst
Clarke, David, American Banker
TORONTO -- The Bank of British Columbia has sued several journalists and a bank analyst after revelations this week that it had requested, and was denied, government deposits to bolster its strength during the banking crisis that hit Canada last fall.
The Vancouver bank was said to have problems following the collapses in September and October of two western Canadian banks, the first banking failures in Canada in over 60 years. It has consistently denied the report of problems and specifically denied that it might merge with another institution.
On Wednesday, Dale Parker, president of Canadian operations for the bank, refused all comment on the matter. Earlier he told the Canadian News Service the bank was "financially strong" and "not negotiating with anyone."
The Canadian Broadcasting Corp. and the Toronto Globe & Mail reported this week that the bank last November asked the national government and governments of four western provinces for $570 million of deposits. (All figures are in U.S. dollars.)
The bank went to court, claiming the stories "have the capability of being extremely damaging." The bank brought its suit in British Columbia against Der Hoi-Yin, a national news reporter for the CBC, and the Toronto newspaper. It also filed a complaint against Roy Palmer, a bank analyst for Alfred Bunting & Co., a Toronto securities firm. It said the stories "may have the most serious consequences for the bank."
Deposits Dropped in Crisis
The latest Canadian banking figures do not reveal a particular problem for the Bank of British Columbia. But they do show that the bank, like other smaller banks, suffered a loss of deposits during the crisis of confidence that hit the industry after the closing of Canadian Commercial Bank, Edmonton, and Northland Bank, Calgary. In fact, the Vancouver bank has improved its health considerably from the difficulties it was experiencing several years ago. And the credit has generally gone to its chairman since 1984, Edgar F. Kaiser Jr., a member of the wealthy Kaiser family and the former owner of Denver Broncos, the professional football team.
An audit last fall gave the bank a clean bill of health. Its proportion of nonperforming loans seemingly gave little cause for anxiety. The nonperformers reached a 1985 peak in the second quarter at $63.8 million and then began declining. But despite the figures, and a healthy capital-to-asset ratio of 7%, many major Canadian banks last fall became shy about leaving their money with the Bank of British Columbia.
Latest figures from the Canada Gazette, a government …
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Publication information: Article title: Bank of British Columbia Sues Journalists and a Bank Analyst. Contributors: Clarke, David - Author. Magazine title: American Banker. Volume: 151. Publication date: February 27, 1986. Page number: 2. © 2009 SourceMedia, Inc. COPYRIGHT 1986 Gale Group.
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