KPMG Hong Kong's weekly banking news summary
This publication is a summary of publicly reported information, the accuracy of which has not been verified by KPMG.
Banks cut prime rate by 75 bps
–
Following the 75 basis points (bps) cut in interest rate by
the US Federal Reserve, the Hong Kong Monetary
Authority (HKMA) reduced the base rate by 75 bps
to 5 percent. The Hongkong and Shanghai Banking Corporation,
Hang Seng Bank and Bank of China (Hong Kong)
have lowered their prime rate by 75 bps to 6 percent.
Standard Chartered Bank (Hong Kong), Bank of East
Asia, DBS Bank (Hong Kong) and other
small and medium-sized lenders have reduced their prime
rate to 6.25 percent.
BOC sets global record in
settlement business
– Bank of China (BOC) has set a new global
record in the international settlement business, with
its mainland and overseas business reaching USD 1.4
trillion in 2007, representing approximately a market
share of 30 percent.
BOC signs financing deal with
gold miner – BOC has signed a RMB
10 billion global financing deal with Zijin Mining Group
(Zijin), the largest gold miner in China by market
value. The strategic cooperation will help Zijin expand
into overseas markets and accelerate domestic
developments.
China banks earn RMB 298.7
billion profits for 2007 – 17 major commercial
banks in China made a combined before-tax profit of RMB
298.7 billion in 2007; a big surge when compared to RMB 36.4 billion
in 2002. The non-performing loan ratio has dropped to 6.7
percent, from 23.6 percent in 2002. Total assets amounted to RMB 52.6
trillion – more than twice the amount of total assets in
2002.
ICBC comes first in bond
underwriting in 2007 – ICBC
has underwritten RMB 79.46 billion bonds in 2007,
ranking first among the domestic peers. The bond
underwriting business has grown significantly from 2005,
when ICBC underwrote RMB 5.2 billion of
short term financing bonds.
Minsheng profit up 60 percent
for 2007 – China Minsheng Banking (Minsheng)
estimated its net profit for 2007 to rise by at least 60 percent, citing strong asset growth, increased
non-interest income, and improved margins.
IB profit rises 126 percent for
2007 – Industrial Bank (IB)
estimated its net profit to increase by 126 percent in
2007.
Nanjing net profit up 50 percent
in 2007 – Bank of Nanjing (Nanjing)
estimated its net profit to rise by roughly 50 percent
over 2006, due to favourable growth in all lines of
business.
BRCB has RMB 1.9 billion in 2007
profit – Beijing Rural Commercial Bank (BRCB)
reported a 23 percent increase in operating profit to
RMB 1.977 billion. Its non-performing loan ratio has dropped
by 4.24 percentage points to 6.83 percent. At the end of
2007, the bank had RMB 182.9 billion in total assets and
RMB 97.4 billion in loans.
Citibank opens 8th China branch
– Citibank (China) has opened its eighth branch in China, in
Dalian. The other seven branches with a total of 23
outlets are in Beijing,
Shanghai, Tianjin, Hangzhou, Chengdu, Guangzhou and
Shenzhen.
Plastics company to invest in CCCB
– Cangzhou City
Commercial Bank (CCCB) plans to issue 400 million
new shares at RMB 1 each to strengthen its capital base.
The bank had RMB 4.308 billion in loans and the
non-performing loan ratio was 2.5 percent at the end of
2007. Cangzhou Mingzhu Plastic
recently has announced its intention to invest RMB 33 million into
the bank. CCCB has not yet signed any letter of
intent or agreement with any parties.
BOB ratings upgraded; BOC
ratings affirmed – Fitch Ratings has upgraded
Bank of Beijing’s (BOB) individual rating from ‘D/E’
to ‘D’. Fitch Ratings cited improved capitalisation post
IPO, improved profitability and enhanced risk management
following the introduction of foreign strategic
investors as factors in the upgrade. It also affirmed
the ratings of BOC's long-term currency Issuer
Default Rating of ‘A’, citing strong expectations of
state support during times of financial stress.
BOC's individual rating stands at 'D'.
In Brief
- China allows investments between banks and
insurers – The State Council has approved a trial to allow banks and insurers to
invest in each other. Banks and insurers will be able to better
utilise their financial resources, boost competitiveness, and
lower financial risk. The banking and insurance regulators have
signed a memorandum of understanding to enhance cross-sector
cooperation.
- QDII banks can invest client funds in
Singapore –
The China Banking Regulatory Commission (CBRC) and the Monetary Authority of Singapore
(MAS) have reached a consensus in supervisory cooperation on
qualified domestic institutional investor (QDII) business of
Chinese commercial banks. Under this agreement, Chinese
commercial banks will be allowed to invest on behalf of their
clients in the Singapore stock market and mutual funds regulated by
MAS.
- HKMA issues CAR manual
– The HKMA has issued a Supervisory Policy
Manual on the revised capital adequacy regime (CAR) under Basel II
for locally incorporated authorised institutions (AIs). The manual
summarises the key supervisory requirements, including
the framework for the calculation of CAR, requirements and
procedures for assessing the capital adequacy of AIs, supervisory
approach and disclosure standards.
|
