Hong Kong - Panic died down Thursday among customers of Hong Kong's Bank of East Asia who a day earlier had rushed to withdraw their savings amid rumours the bank was facing collapse.

Long queues of hundreds of customers died away Thursday morning after Hong Kong's chief executive, the head of its central bank and the bank's chairman all insisted the institution was not in difficulty.

Text messages widely circulated from Monday said the bank was on the brink of collapse, sparking a rush to withdraw funds from the bank's 130 branches in Hong Kong.

Chairman David Li flew back to Hong Kong and said Thursday that he would increase interest rates by half a percentage point for customers who reopened fixed deposits they closed yesterday.

Confidence in the bank's future was also buoyed by the intervention of Hong Kong's richest man, Li Ka-shing, known locally as "Superman," who announced he was buying shares in the bank.

The run on the bank, which had to open for an extra half-hour Wednesday to cope with the queues, was sparked by rumours it had suffered heavy losses from the collapse of the US investment bank Lehman Brothers Holdings Inc.

Monetary Authority chief Joseph Yam assured customers Wednesday that the bank was safe, and the territory's chief executive, Donald Tsang, added his assurance Thursday.

Tsang said Hong Kong banks were stable and said people "should not worry about their liquidity."

The Bank of East Asia blamed "malicious rumours" about the bank's stability for the run on the bank and said it had called in police to investigate.

In a statement, the bank said it had assets of more than 50 billion US dollars in June and its capital adequacy ratio was "well above the international required level."

It said the bank's exposure to Lehman Brothers and American International Group Inc, the world's largest insurer, which was bailed out by the US government last week, was 422.8 million Hong Kong dollars (54.46 million US dollars) and 49.9 million Hong Kong dollars, respectively.

Set up in 1918, the Bank of East Asia is the largest independent local bank in Hong Kong and had consolidated assets of 50.85 billion US dollars as of June 30, according to its website.

The bank has 60 outlets in mainland China and around 30 more in the United States, Canada and Britain and employs more than 10,800 people worldwide.