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ICBC Brazil ICBC Brazil(0)

“We have plans to operate in Brazil, however, so far we did not decide how to operate it,” said ICBC Chairman Jiang Jianqing, quoted by the newspaper.

In March, the Brazilian central bank authorized the state run Bank of China Ltd. to operate in Latin America’s largest nation.

Source : Konaxis

Interpretation of Central Bank’s third-party payment regulation: License valid for 5 years Interpretation of Central Bank’s third-party payment regulation: License valid for 5 years(0)

Payment institution which intends to continue with “payment business license” should apply for renewal of registration at local branch of Chinese people’s central bank within 6 months before the expiration. Each renewal is valid for 5 years.

Chinese people’ bank announced today at the official website of the “non-financial institution payment service management approach” , without the approval from the Chinese people’s bank, any non-financial institutions and individuals shall not engage in or disguisedly engage in payments business. The method has been approved on May 19, 2010 by 7th President Office Council meeting. Starting from September 1, 2010 the regulations will come into force.

Regulations are clear that if the non-financial institution is going to provide payment services, it should apply for the “payment business license” based on provisions to become a payment institution.

For non-financial institutions in business before the publishing of this approach, they should apply for “payment business license? within 1 year after the implementation of this regulation. Institutions overdue in admission may not continue to make payment business.

China First Trade Deficit China First Trade Deficit(0)

Banks lent 2.6 trillion yuan ($381bn) between January and March, a 43% drop on the 4.6tn yuan they lent a year earlier, the central bank said.

The state is trying to curb lending to prevent the economy from overheating and prices from rising too fast.
It has set a limit for lending for the whole of 2010 of 7.5tn yuan.

This is well below the 9.6tn yuan lent last year. Much of this lending boom was sparked by government stimulus measures.

The government is now keen to rein in spending to cool growth.
It is also concerned about inflation, which hit a 16-month high of 2.7% in February.

The central bank also said on Monday that China’s foreign exchange reserves hit a record $2.5tn at the end of March.

This was despite the fact that the country recorded its first monthly trade deficit in nearly six years.

Rising volumes and prices of raw materials left China with a deficit of $7.2bn in March, the bank said.

Source : Konaxis

Legalizing gray-area private lenders Legalizing gray-area private lenders(0)

The People’s Bank of China plans to submit proposals for the regulatory changes to the State Council, or cabinet, as soon as possible, said Zhou Xuedong, director general of the central bank’s law and regulation department.

Mr. Zhou said the central bank plans to propose removing a rule that has been in place since 1995 that caps interest rates charged by makers of microloans at four times the benchmark lending rate. He told a financial forum in Beijing that in practice many microlending firms have charged rates above the ceiling.

He also said the central bank has drafted a proposal to legalize non-bank private-lending firms, which have been playing an important role in supporting some small businesses, despite their semi-legal gray-market status.

China’s banks have been keen to lend to large or state-owned enterprises, while the share of credit going to smaller or private firms remains small due to concerns about their ability to repay loans and the transparency of their asset structure.

He said the central bank will also propose easing restrictions to allow microlending firms to borrow money.

The PBOC plans to let microlending firms borrow amounts equal to no more than two times their net capital from up to two financial institutions and one non-financial institution, in comparison with the previous ceiling of 50% of their net capital, he said.

Source : Konaxis

China loan-sale practice China loan-sale practice(0)

The transactions at issue had enabled banks to move loans off their balance sheets by temporarily selling them to Chinese trusts, lightly regulated companies that then repackaged the loans into financial instruments for clients. The banks promised to repurchase the loans any time between a few weeks and a few years later.

The China Banking Regulatory Commission issued a notice banning banks that sell loans to trusts from removing the loans from their balance sheets, said an executive in the risk management department of a Chinese bank who has seen the document. The notice was issued on Dec. 24, but wasn’t made public.

Chinese newspapers have reported that it was sent to all Chinese banks.

While no official data on the loan-sale practice is publicly available, Shanghai Benefit Investment Consulting, a research company, estimates that 734 billion yuan ($107.53 billion) of bank loans were packaged into trust products in 2009. About 80% of that was issued in the second half of the year, as Beijing’s concern about loan growth mounted.

Not all the loans sold to trusts fall into the category barred by the CBRC notice, but the order appears to have nearly halted such transactions. According to Shanghai Benefit, only seven new trust products backed by banks loans have gone on sale this month, compared with 465 for the whole of December.

“It’s become a lot harder to get approval for new products,” said Tang Liqiong, an analyst at Shanghai Benefit, adding the banks loaded most of their new issuance into the beginning of December as rumors circulated Beijing might rein in the practice.

Source : Konaxis

Chinese banks capital situation Chinese banks capital situation(0)

“It is a common practice for banks to review their loans position at the end of the year and draft plans to replenish capital over the coming years,” the China Banking Regulatory Commission official said.

He was referring to market worry that major State-owned banks were mulling big fund raising plans that could strain the bourses through massive new share sales.

Regulators have been pressing banks to closely watch their capital positions after an unprecedented surge in lending this year, leading some lenders to think of replenishing their capital through share and bond sales.

She Minhua, a banking analyst at Haitong Securities, said it was reasonable that major listed banks were thinking about raising more capital, as three years had passed since their IPOs.

“Actually, these banks are now making plans for a rainy day, as their current finances are still very healthy and can support their business expansion for at least one year,” he said.

ICBC said it had no plan to raise capital in the short term, as its capital adequacy ratio, which was 12.6 per cent at the end of September, was still relatively high.

Source : Konaxis

U.S. bankers help investment U.S. bankers help investment(0)

Global wealth declined last year for the first time since 2001, the consultancy said, but the number of Chinese individuals with household financial wealth of more than $1 million may grow to 788,000 by 2013 from 417,000 in 2008, Reuters reported.

According to the consultancy?s definition, financial wealth includes cash, equities and bonds but excludes real estate and privately owned enterprises.

Foreign banks, including HSBC Holdings, Citigroup and Bank of East Asia, have all started private banking businesses in China, competing for affluent clients with local rivals like the Bank of China.

Globally, total assets of rich individuals declined by 11.7 percent, to $92.4 trillion in 2008 because of the global financial crisis, the first decline since 2001, but Boston Consulting Group expects growth to resume over the next few years.

Source : Konaxis

French banking partners in China French banking partners in China(0)

The bank was also looking for opportunities to buy into a Chinese bank with a broader national retail network, as it needs more local retail outlets for its products, the newspaper said, citing one of its top executives.

France’s second-largest lender, which opened its wholly-owned unit in China last year, has extended its business portfolio in the country from corporate and investment banking to include retail and private banking, the newspaper said.

With a new branch opened in Tianjin in early September, SG has increased its footprint in China to five cities through its seven outlets in Beijing, Shanghai, Guangzhou, Wuhan and Tianjin.

In addition to banking services, SG China is seeking opportunities to expand its insurance and securities business in the country. It opened an insurance business representative office in Beijing two years ago.

Source : Konaxis

Wing Hang Bank for China banks Wing Hang Bank for China banks(0)

Industrial & Commercial Bank of China Ltd., the world?s largest by market value, is the Chinese lender showing the most interest in acquiring Wing Hang, according to two bankers.

A takeover of Wing Hang would cut the number of publicly traded family-run banks in Hong Kong to three from six a decade ago, as mainland-based lenders muscle in on the territory.

The bank?s board said Aug. 13 it will pay an interim dividend of 20 Hong Kong cents per share. The proposed payout represents 11.5 percent of earnings, down from 13.3 percent in the year-earlier period.

Reducing the dividend was unnecessary because Wing Hang already had a capital adequacy ratio of 17.7 percent, well above the regulatory minimum ratio of 8 percent.

Retaining a higher portion of profit may raise Wing Hang?s book value and push up the sale price in a takeover, said analysts.

A takeover would likely value Wing Hang at between 2.5 and 3.3 times book value, said analysts. The bank trades at 1.9 times book value, according to Bloomberg data.

Source : Konaxis

Beijing Banks charge higher rates Beijing Banks charge higher rates(0)

The requirement is for the buyers to pay at least 40 percent of the purchase price as initial down payment and the balance through a mortgage with an interest rate of 6.53 percent, a rate which is 1.1 times the standard lending rate.

The interest rate discount for first time buyers had gone up to 30 percent off the centrally determined benchmark lending rate which is set by the People’s Bank of China, the country’s central bank. The new rates are part of the central government?s attempt to control real estate speculation and lower excess liquidity.

China Banking Regulatory Commission, which regulates China’s banking industry, said again in June that banks must implement the 40 percent down payment requirement which was first announced on Sept 27 in 2007. However, banks were given until July to set their own loan interest rates.

China’s Big Four banks, — China Industrial and Commercial Bank, Bank of China, China Construction Bank, and Agricultural Bank of China — have strictly followed the Sept 27 requirement, and other banks are following their lead, according to insiders of the real estate industry.

However, according to the Shanghai Youth newspaper, some banks are not following the new rules and continue lending at lower rates in Shanghai, which local regulators denied.

Source : Konaxis

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