BEIJING, March 15: Bank of China on Saturday ruled out swooping on Western financial institutions, felled by the still-spreading global credit crisis.

“We certainly will not buy into institutions, like Bear Stearns,” Xiao Gang, the chairman of China’s fourth-largest bank by assets, told reporters.

JPMorgan Chase & Co and the Federal Reserve Bank of New York agreed on Friday to provide emergency financing to Bear Stearns Cos after the investment bank said its cash position had deteriorated sharply, sending its shares into freefall.

Speaking on the sidelines of the annual session of China’s parliament, Xiao said he was most interested in acquisitions in the Asia-Pacific and the Middle East.

But he declined to comment on reports that the Bank of China is on the shortlist to buy into Bank of Internasional Indonesia, the country’s sixth-largest lender.

Malaysia’s Maybank is the frontrunner to buy Singapore state investor Temasek’s stake in BII, valued around $800 million, a Malaysian business weekly reported on Saturday.

Bank of China is the Chinese lender that has been hardest hit by the US subprime mortgage crisis, which Xiao said had not yet peaked.

But he reiterated that the bank would report “marked” profit growth for 2007 because its subprime exposure was limited.

“Our subprime-related investments accounted for only 2.3 per cent of our total securities portfolio,” Xiao said. “After some disposals in the fourth quarter, the percentage was even smaller by the end of the year.” Bank of China reported securities holdings of 1.96 trillion yuan at the end of September, out of overall assets of 6.02 trillion yuan.

The bank had made full provisions at the end of 2007 but was prudently re-evaluating its securities portfolio in light of the continued deterioration in market conditions, Xiao said.—Reuters