HONG KONG - A HONG KONG bank said on Monday it has about 362 million Hong Kong dollars (S$67.3 million) in exposure to failed American bank Washington Mutual.

Dah Sing Banking Group Ltd made the announcement as Hong Kong investors remain jittery about the US financial crisis.

Last week, locals withdrew deposits from Bank of East Asia after unconfirmed rumors that it was failing. The Hong Kong Monetary Authority denied the rumors.

Dah Sing said it isn't clear what losses it will suffer from its exposure but that it could book a maximum post-tax charge of HK$330 million (S$61.6 million) in 2008.

As a precaution to prevent its capital adequacy ratio from dropping, the bank said its majority shareholder, Dah Sing Financial Holdings Ltd, will buy HK$400 million (US$52 million) in new debt to be issued by Dah Sing Bank Ltd to shore up its finances.

Dah Sing Bank is one of Dah Sing Banking Group's three subsidiary banks.

The deal is subject to approval by the Hong Kong Monetary Authority, the bank said.

Seattle-based lender Washington Mutual was seized by the Federal Deposit Insurance Corp. last week and had its banking assets sold to JPMorgan Chase & Co for US$1.9 billion.

The holding company, Washington Mutual Inc., filed for Chapter 11 bankruptcy protection late on Friday in US Bankruptcy Court in Wilmington, listing almost US$33 billion in assets and US$8.1 billion owed to creditors. -- AP