STAFF at the Singapore branch of the Bank of East Asia (BEA) averted a potentially disastrous run on deposits yesterday when they convinced hundreds of anxious customers that the institution was sound.

BEA employees were on hand - some from as early as 7.30am - to assure clients that Hong Kong-based rumours of the bank's shaky finances were completely unfounded. It also extended banking hours by half an hour, closing at 4pm.

BEA Singapore had some help in its efforts to assure customers.

The Monetary Authority of Singapore (MAS) issued a statement yesterday advising customers here to 'not to act hastily in response to unfounded rumours'.

It also reaffirmed what Hong Kong regulators had stated: that BEA was safe and that the rumours were unfounded.

Staff at BEA's Singapore branch located along Market Street handed out copies of the MAS statement as well as a statement from the bank, confirming that BEA Singapore has no exposure to the now bankrupt Lehman Brothers.

The rumours had sparked a run on BEA branches in Hong Kong on Wednesday, so bosses here were prepared.

BEA Singapore's head of personnel and administration, Mr Lim Lok Chiang, told The Straits Times that they anticipated a crowd and made plans. 'We mobilised additional staff from various departments to ensure that customers could be attended to as fast as possible and had access to information,' he said.

The initiative seemed to have worked.

'I came here because I was a bit worried,' said a 56-year-old customer who wanted to be known as Madam Yu. 'But the staff here said the MAS says they are okay and they have enough funds in their system, so I trust them.'

A customer told The Straits Times that it was a good sign that BEA was quick to disclose information to customers.

And a client in his 50s told The Straits Times: 'I came to transfer some of my funds from my fixed deposit account to another savings account with the bank.

'I did not pull out any funds, the bank is okay; there is no need to listen to those rumours in Hong Kong.'

But a man in his 60s, who left the bank with 'a few thousand dollars' in a paper bag, said: 'I don't think the bank has any problems but I am just withdrawing my cash - just in case.'

Mr Lim said BEA Singapore has about 10,000 retail customers and 1,000 corporates. The bank employs about 170 staff.

Although BEA could not provide actual figures on withdrawals made yesterday, Mr Lim said the transactions were still 'manageable' and 'within the bank's capacity'.

'Yes, some customers came to withdraw their funds and we facilitated their requests. But most were here because they were either curious or just anxious due to the current climate,' he added.

The bank scare began in Hong Kong, where BEA's parent company is based.

Rumours began spreading via text messages on Tuesday, calling into question the bank's viability and sparking one of the first bank runs in Asia since this crisis began. Hordes of customers, hearing about BEA's exposure to Lehman, demanded their deposits back the next day.

Hong Kong's central bank responded by injecting HK$3.883 billion (S$710 million) into the interbank market to ensure liquidity and restore confidence.

The MAS statement yesterday cited its Hong Kong counterpart, which said that BEA's 'asset quality is good and their operations have been strong. BEA's capital adequacy and liquidity ratios are well above regulatory requirements'. MAS also said that BEA has confirmed that its 'financial position is sound and stable'.

DBS Bank, which has a significant presence in Hong Kong, said in a statement on Wednesday that its unit there 'is in a strong financial and capital position, and our asset quality remains good'.

It also confirmed that its overall exposure to Lehman is 'insignificant' and assured customers that their deposits in DBS are safe.

franchan@sph.com.sg