Bank of China customers lose $ 1 billion due to collapsed oil
US, WASHINGTON (ORDO NEWS) — Losses of investors from falling prices for products related to American crude oil futures will rise to more than 7 billion yuan ($ 1 billion), Bank of China experts calculated, Bloomberg reports.
The lender’s loss estimate for customers throughout China increased from approximately 600 million RMB in the middle of last week, as more information was collected from more than 10,000 outlets.
Such an assessment is not final and is subject to further changes, as the lender is studying data from its branches, said one of the sources.
Losses occurred because the bank entered into contracts for the May West Texas Intermediate oil futures as part of its crude oil treasure product on April 20 at a price of minus 37.63 per barrel, as a result of which Bank of China customers ended up in the center of an unprecedented oil collapse to below zero.
Hundreds of bank customers on the Internet expressed their protest by such actions of the bank and demanded compensation of some losses from the lender.
The Bank of China declined to comment. Since launching the product in January 2018, it has not disclosed the size or performance of the “crude oil treasure” product.
The bank suspended trading on this product last week. The largest banks in China, including China Construction Bank and Bank of Communications, have also stopped selling similar products, which have become a popular way for people to speculate on oil fluctuations.
Caixin said that more than 60 thousand customers have invested in the Bank of China product, adding that investors lost their $ 4.2 billion margin and owed the bank another 5.8 billion yuan.
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