News

Public Bank has launched the PB Lifestyle (Phase II) - Live Up Your Life with PB Cards campaign, after receiving positive response for its More Swipes, More Rewards campaign or PB Lifestyle (Phase I).

Standard Chartered and World Bank Group member IFC have agreed to develop a $1.25 billion funding partnership to facilitate global trade finance.

HSBC's conference will focus on the advantages of tapping the 'Sukuk' bond market for infrastructure development financing.

BEA’s new China UnionPay debit card will enable customers to access ATM services at all JETCO ATMs in Hong Kong, Macau, and Mainland China.

Mitsubishi UFJ and Morgan Stanley will form a new company to address the securities needs of wholesale and retail customers in Japan. It will also offer various Japan-related financial products and services to overseas customers.

ANZ will open additional branches and establish a new rural bank in western China in its thrust to become a leading foreign bank in China. It is now completing final regulatory approvals for the establishment of a new rural bank in Liangping, a county near the western city of Chongqing, with a population of more than 900,000 people.

RBS will make Transamerica Insurance’s flagship Universal Life policies available to its customers.

HSBC will maintain its Hong Kong benchmark lending rate at 5 percent per annum last changed on 10 November 2008.

J.P. Morgan announced today that it has been selected by Government Services Insurance System (GSIS) of the Philippines to serve as custodian for its US$1 billion overseas investment programme.

Ningbo goes live with Misys Opics Plus to manage increased trade volumes, strengthen risk practices and to develop derivative business.

Bank of East Asia head honcho and chairman of the Chinese Banking Association, David Li, has been forced into eating a cold serving of humble pie after his seemingly untouchable bank suffered its first loss in 40 years. “BEA hasn’t posted a loss since at least the 1960’s,” said the bank’s spokesperson, Vera Lung. So why did it take the bank four decades to post a loss? The bank made a loss after writing down the value of credit-market investments, according to Bloomberg. For the six months ending 31st December BEA was hit with a USD110 million deficit just months after the bank’s shares fell 61 percent, according to Bloomberg. The bank’s results may come as a shock to some but not to Core-Pacific Yamaichi analyst, Lee Yuk-kei who wasn’t at all surprised by BEA’s poor performances due to the bank’s questionable handling of its expenses. “BEA has never been good at controlling expenses,” said Lee. So what can Li do to remedy the ills of his ailing bank? Rumours are aflutter that Li, a current member of the Hong Kong Legislative Council, is planning to cut costs by forcing his workers to take one day of unpaid leave per month, according to Bloomberg. So will Li’s plans help to restore BEA to its former glory? Times are grim and Li knows it. “The effects will be felt by the bank well into 2009,” said Li. And there’s no love for next year’s results either it seems with Morgan Stanley analyst Anil Agarwal expecting BEA “to have almost zero profits in 2009.”

Desperate times call for desperate measures and times couldn’t be more desperate than they are now in the Chinese banking sector with economic growth grinding to a halt and domestic loan growth draining bank capital at an alarming rate, according to Bloomberg. China Construction Bank for example plans to sell USD5.9 billion in subordinated bonds. So why is CCB flogging such a big chunk of its bonds? The bank’s president, Zhang Jianguo is selling the bonds in order to stock up on capital and strengthen CCB’s risk-management capabilities. A CCB spokesperson said that the banking giant “would sell USD2.1 billion of 10-year bonds and USD2.1 billion of 15 year bonds on China’s interbank market.” But isn’t the bank jumping the gun? Not so according to the Chinese government which is urging the country’s lenders to bolster their capital adequacy ratios to 12 percent in 2009 thus guarding against credit risks as the global recession goes into overdrive, according to Bloomberg. Minzu Securities analyst, Zhang Jing said that “Chinese banks need to replenish capital after a spell of record-breaking loan growth in recent months.” However CCB isn’t the only bank selling bonds with the Bank of Communications set to sell USD11.7 billion in bonds over the next three years and ICBC looking to sell USD14.6 billion in bonds, according to Bloomberg. So how will CCB, the Bank of Communications and ICBC benefit from the capital injection? The country’s banks which require USD146 billion funding surplus according to UBS, are selling bonds to benefit from the lower interest rates in preparation for the “rainy days to come as the surge in lending is bound to drain their capacity quickly,” said BOC analyst Yuan Lin. So who will purchase the bonds you might ask? Members of the interbank market which includes institutional investors and banks such as HSBC and StanChart seem to be the only ones that can buy at the moment. Banks just so happen to use subordinated debt on the interbank market to bolster Tier 1 and upper and lower Tier 2 capital, according to Bloomberg. So can the central bank lift China’s banking sector out of the doldrums? The central bank seems to be pulling out all stops to save its precious banks and it shows in the amount of times it has slashed its lending rate. The benchmark lending rate was slashed by the central bank up to five times by a total of 2.16 percent since September 2008, according to Bloomberg. It seems only time will tell if the capital raising and lower lending rates is enough to save China’s banks.