BANK of China Ltd (stock code: 601988), the nation's largest foreign-exchange lender, denied a report it may have a 3.85-billion-yuan (US$508 million) loss this year from investments in US sub-prime loans.

"The report is groundless and irresponsible," Wang Zhaowen, a spokesman at the Beijing-based bank, said in an e-mailed statement yesterday.

The company will disclose information about sub-prime-related holdings in its first-half earnings report due on August 23, Wang said. Bank of China said this month its sub-prime losses for the six months would be "insignificant," without giving details.

Six Chinese banks with shares traded in Hong Kong may lose a combined 4.9 billion yuan on sub-prime investments in 2007, Beijing-based Capital Week reported on Sunday. That includes the Bank of China figure as well as an estimated loss of 103 million yuan for China Merchants Bank Co (stock code: 600036).

Shares of Bank of China have fallen 10 percent in Hong Kong during the past month as financial stocks in Asia-Pacific markets slid on concern over fallout from the collapse of loans made to people with shaky credit histories and the decline in securities based on those loans, Bloomberg News reported.

Shares of Mitsubishi UFJ Financial Group Inc, Japan's biggest bank, fell to their lowest value in almost two years today after Australian mortgage lender Rams Home Loans Group Ltd said "unprecedented disruptions" in credit markets may reduce its profit. The Japanese bank said it has about 300 billion yen (US$2.5 billion) worth of investments that incorporate sub-prime loans.