Arab Banking Corporation (ABC) was forced to move funds into International Bank of Asia (IBA), its Hong Kong subsidiary, on 10 November after rumours about IBA's financial health led to a two-day run on its deposits. Hong Kong's financial authorities also said they would back the bank if need be. IBA said on 12 November that the 'minor run' was over.

Economic turmoil in east Asia in recent months has led to speculative attacks on Hong Kong's dollar, leading to a rise in short-term interest rates in the territory and creating an uncertain atmosphere in which rumours thrive. IBA is seen by industry analysts as a dynamic and successful retail bank, but the belief that it was in trouble led depositors to take out HK$ 1,500 million ($115 million) on 10 and 11 November. ABC owns 55 per cent of IBA, its most successful foreign investment. IBA has produced a steady stream of profits over the last few years and earns a better return on equity than ABC itself.

IBA vice-chairman Mike Murad called a hasty news conference on 10 November to reassure the media that the bank, which is 55 per cent owned by ABC, had received an unspecified amount of funds from its parent and could meet all its obligations. 'We have complete faith in IBA which is a profitable, highly liquid and prudently managed bank ...We wish to assure all customers of IBA that we stand fully behind IBA,' ABC said in a statement issued from Bahrain. 'There is no reason to be concerned, but we wish to make it clear that IBA has access to resources many times its own size.' ABC has assets of $23,000 million. The statement said that China Everbright Holdings, the largest minority shareholder in IBA, would also help out. The Hong Kong Monetary Authority, the territory's central bank, said it would provide liquidity to IBA if needed.

After a two-day panic, the anxiety appeared to have subsided and the queues outside the bank's branches shrank. Ratings agencies are unlikely to downgrade either IBA or ABC: Moody's Investors Service says it believes both banks are strong enough to deal with any problems. 'It is beyond me how rumours spread and can become so effective,' Murad told Reuters the next day, citing the bank's liquid state and diversified range of businesses. Contrary to the rumours, IBA did not have loss-making foreign exchange positions and was not exposed to the wildly fluctuating Hong Kong stock market, he added. 'Looking back, we will be a better bank for having gone through this unfortunate event.'