September 29, 2005

BEA Keeps Its Powder Dry in China, But Won't Get Left Out


BEA says that it has been circling several mainland banks, but without success so far. GM Raymond Yu feels that it's early days in China, and doesn't seem to feel any pressure to be a first mover - in fact quite the opposite:

"There's no need to worry, each foreign bank can only partner with two local players. HSBC is out of the game," he said.

The Standard article notes that BEA would like to buy 19.9% (the maximum) stakes in two city commercial banks: one in the north and one in the south, but so far seems to have lost out in the bidding for Nanjing CCB (likely to BNP) and Minsheng Bank.

Posted by The Banker at 09:57 AM | TrackBack

September 06, 2005

HK Banks Push For Expanded RMB Powers

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Hong Kong's bankers expect a liberalization of the rules which last year allowed them to take RMB-denominated deposits from private individuals in Hong Kong, and to settle payments and credit cards in the mainland currency. This morning's SCMP quotes ICBC (Asia) Deputy General Manager Stanley Wong as saying:

"The second phase will be relatively small. The reforms are more likely to be a friendly gesture to show the central government's support for Hong Kong rather than a radical change"

"We expect there will only be small-scale changes and any profitability will be minimal," Mr Wong added.

Our recent conversations with bankers in the territory have revealed that they hope to get approval to take RMB deposits from corporates, and to make trade finance loans in RMB. Using their RMB deposits to fund loans instead of selling them back to the clearing bank (BOCHK) would permit banks to earn a much wider spread than they presently enjoy on the business. Even so, the impact on profitability in the near term would be mainly theoretical.

Note that no one we spoke with anticipates that HK banks with branches in the mainland will be allowed in this second phase to recycle their RMB deposits in Hong Kong into RMB loans out of their China offices. That is likely a minimum of 3-5 years down the road, in their view.

Posted by The Banker at 10:45 PM | TrackBack

September 02, 2005

Asia Financial Results Marred by High Provisions


Asia Financial Holdings (662.HK) reported 1H05 earnings last evening down 14% YoY due largely to its Asia Commercial Bank unit.

ACB's income fell by 29% on higher provisions for borrower Moulin Global Eyecare Holdings, which has gone into liquidation.
NIM also fell by 33bps despite double-digit loan growth.

* HK Exchange Results Filing
* HK Standard Article

Posted by The Banker at 07:09 PM | TrackBack