HK rocked by first bank run in 10 years

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The bank blamed "malicious rumours" for the crisis in confidence and chairman David Li rushed back to Hong Kong from the US to reassure depositors and investors.

Hong Kong's central bank jumped to BEA's defence and police are investigating phone text messages questioning its health.

"The rumours were groundless," Li said on arriving at Hong Kong airport. The bank has no problem."

BEA's woes underline fragile public sentiment towards lenders and financial firms and echo scenes last week in Singapore as customers rushed to AIG's local offices to terminate insurance policies.

Joseph Yam, chief executive of Hong Kong's central bank, urged depositors to "stay calm".

Under Hong Kong's deposit insurance programme, depositors are protected by just HK$100,000 (£7000) in the case of a bank failure.

The Hong Kong Monetary Authority injected HK$3.88 billion into the banking system, after the interbank lending rate surged.

Hundreds of depositors lined up outside BEA branches to withdraw money.

Credit Suisse analysts Christopher Esson and Frances Feng said in a research note to clients: "While we believe the risk profile of BEA has increased as a result of today's events, the lack of fundamental basis for the deposit outflows makes us believe this crisis will pass relatively quickly with limited impact."

Other banks moved to reassure the public about their finances. Fears were growing over a run on DBS Group, South-east Asia's biggest lender by assets, but its Hong Kong unit was "in a strong financial and capital position", the Singapore-based bank said.

"DBS Group's exposure to Lehman is insignificant," the bank added.