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China’s shadow banking sector now valued at over U$5.8t
MARKETS
Taiwan’s FSC concerned about new business tax Says it would cut weak profits in an unfavorable economic environment. Financial Supervisory Commission Chairman Chen Yuh-chang is questioning a proposal by lawmakers to raise the business tax on financial institutions to 5% from 2% to increase government revenues. RETAIL BANKING
UOB to suffer 5% profit dip to $662m Net interest income is still weak. According to CIMB, they expect UOB to report 1Q13 net profit of S$662m (down 5% qoq, in line with consensus). UOB 4Q12 results had a similar tone to peers – margins were still on a downward trajectory, NII was weak and revenue was supported by strong non-interest income. RETAIL BANKING
HK and Singapore banks fear losing key staff
petitors this year. TRADE FINANCE
How smaller transaction banks can challenge StanChart, HSBC, Citi Cumulative market share of the ‘Big Three’ is now down to 52.9%. According to East & Partners, tighter lending margins coupled with fierce competition for deposits have placed immense pressure on local and international banks in Asia to secure and maintain market share. RETAIL BANKING
Weak deposit growth hammers China’s banks Loans exceed deposits at
Nine in 10 banks and financial services firms also experience recruitment problems. A study conducted by recruitment firm Robert Half showed that 93% of Hong Kong respondents and 92% of Singaporean respondents were concerned about losing important employees. About eight in 10 said they worry about losing top performers to com6 ASIAN BANKING AND FINANCE | SEPTEMBER 2013
a faster pace. China’s largest lender, the Industrial and Commercial Bank of China Ltd, and other banks are now paying more for savers’ money and are being hit by falling margins. ICBC said loans were growing at a faster rate than deposits. Deposits rose 4.5% while loans rose 5.2%, the bank said. Another Big Four stateowned bank, Agricultural Bank of China Ltd, reported similar numbers, with its loan book growing about 10% faster than its deposit base. RETAIL BANKING
Citi to open 6 more Asian desks for its corporate clients in the next 12
It’s 69% of China’s GDP. JPMorgan Chase said this total was equivalent to 69% of China’s gross domestic product and almost double what it was two years earlier. Previous estimates from other sources said the shadow banking sector accounted for 60% of GDP. JPMorgan said it is the rapid growth in shadow banking, instead of its size, that could generate systemic risk. Previous means estimates for the size of China’s sector have ranged from as low as 2 trillion to 3 trillion renminbi to a high of 30 trillion renminbi.
months Find out where the desks will be located. Citi recently announced that it plans to open six more Asian desks in the next 12 months to serve Asian corporate clients across the world tax. The desks will compliment the 13 already opened by the bank that are servicing Asia’s leading corporate clients. RETAIL BANKING
Here’s why DBS’ 1Q13 was mindblowing for analysts Loans rose by 6.2%. According to CIMB, they were blown away by DBS’ 1Q13. Net interest income grew 2.6% qoq as NIMs unexpectedly expanded and loans grew 6.2% qoq. Fee income was strong all around, particularly trade-related and capital-markets related fees. DBS HK sustained its turnaround with profits up 35% qoq.
ISLAMIC BANKING
India launches first Islamic equity index Provides a new benchmark for Islamic investors. The Bombay Stock Exchange said the Islamic equity index is based on the wide-measure S&P BSE 500 index. The new index comprises the largest 500 companies in the BSE. It adheres to Islamic finance principles such as prohibitions on investing in alcohol, tobacco and gambling-related businesses. RETAIL BANKING
Philippines increases MBO deposit limits by 63% Move intends to help promote financial inclusion in rural areas. The Rural Bankers Association of the Philippines said this initiative by the Bangko Sentral ng Pilipinas, the central bank, to increase the deposit limits of micro-