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New Zealand keeps cash rate; ANZ's stake in AmBank may be overvalued

Banking Essentials Newsletter - November Edition

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University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts

Estimating Credit Losses Under COVID-19 and the Post-Crisis Recovery


New Zealand keeps cash rate; ANZ's stake in AmBank may be overvalued

* The Reserve Bankof New Zealand saidit has maintained theofficial cash rate at 2.25%. The central bank added that long-terminflation expectations are well-anchored at 2%.

* Industrial &Commercial Bank of China Ltd., Bankof China Ltd. and Russia's AOGazprombank will be key lead managers in helping the Russian governmentguarantee what will be the yuan bond market's largest foreign sovereign issue worth6 billion yuan, the South China Morning Postreported,citing a source.

* ICBC has introduced its credit cards in New York to serve frequenttravelers between the U.S and China, Xinhua News Agency reported.

* American ExpressCo. will launch Samsung Pay in Australia soon, following Apple Pay'ssuccessful entry into the country, ZDNet reported,citing a statement from the bank.

* Australia &New Zealand Banking Group Ltd.'s US$5 billion stake in Malaysia's may be overvaluedand may need to be written down, The Australianreported,citing a CLSA analyst.

GREATER CHINA

* China might be able to set up a platform to issue Special DrawingRights-denominated bonds in the domestic capital market by the middle of 2016, The Wall Street Journal reported. The schemewill help realize some of China's strategic monetary and economic goals, includingthe internationalization of the yuan.

* The nonperforming loan ratios and the balance of nonperformingloans of 14 listed Chinese banks rose in 2015, with various banks' nonperformingloan balance growing more than 50% year over year, Phoenix Finance reported.  AgriculturalBank of China Ltd., ChinaMerchants Bank Co. Ltd. and PingAn Bank Co. Ltd.'s nonperforming loan growth rates all surpassed 68%.The NPL ratio at China's commercial banks rose to 1.83% as of the end of February,20 basis points higher from the end of 2015.

* The China Insurance Regulatory Commission said Chinese insurers'original premiums surpassed 1 trillion yuan in the first quarter, the National Business Daily reported. However,insurers' profits during the period are expected to decline 55.3% year over yeardue to macroeconomic situations and capital market fluctuations.

* The People's Bank of China has shown concern over internetfinancing and private lending and wants legislation to counter illegal fundraisingactivities, Shanghai Daily reported,citing representatives of 14 administrative departments in the country.

* Taiwan's YuantaCommercial Bank Co. Ltd. acquired 99.99% of Thailand's KKTrade Securitiesfor NT$645 million, Taiwan's Central News Agency reported. KKTradewill change its name to Yuanta Securities (Thailand) after the deal is completed.

* China DevelopmentFinancial Holding Corp. said it would continue to implement capitalreallocation to boost the company's return on equity performance and to ensure sustainablegrowth, in an effort to counterbalance ongoing macroeconomic downward pressures,the Taipei Times reported.

JAPAN AND KOREA

* Sumitomo MitsuiFinancial Group Inc. will combine SMBC Nikko Securities Inc. and SMBC Friend Securities Co.Ltd. into a single brokerage unit, The AsahiShimbun reported.

* Bank of Japan Governor Haruhiko Kuroda ruled out the possibilityof exempting financial institutions in the earthquake-hit Kyushu region from negativeinterest rates, The Mainichi Shimbun reported.  

* Japan Post InsuranceCo. Ltd. will move up the target year for allocating 1% of its portfolioassets to risk assets from fiscal 2017 to fiscal 2016, The Sankei Shimbun reported.

* Ten of Japan's major life insurance companies, including JapanPost Insurance, and four of the country's largest nonlife insurers plan to investmore than ¥5 trillion in total in overseas bonds during fiscal 2016, Tokyo's The Nikkei reported.

* South Korea's Financial Services Commission has approved 'splan to run Korea Kakao Bank, an internet-only bank, as a subsidiary, The Chosun Ilbo reported.

* KEB Hana Bankwill invest US$200 million to buy an 8% stake in Sirius International Insurance Corp., Yonhap News Agencyreported.

* KEB Hana Bank was appointed the lead manager of a US$100 millionaircraft financing deal for AerCapHoldings NV, the Maeil BusinessNewspaper reported.

* The FSC will require financial institutions to disclose detailedinformation on their websites about newly appointed or dismissed directors, includingreasons for their appointment or dismissal, MoneyToday reported.

ASEAN

* The Thai Bond Market Association said the value of Thai bondsheld by foreign investors during the first quarter went up by 98.77 billion baht,Thailand's Krungthep Turakij reported.

* Krisada Chinavicharana, director-general of Thailand's FiscalPolicy Office, said his office has not found any significant movements of cash causedby the government's plan to lower deposit protection, Thailand's Manager Daily reported.Meanwhile, executives of several banks expressed agreement with the Thai Cabinet'sresolution to delay a plan to lower the amount of deposit protection and said postponingthe plan is beneficial for consumers.

* Executives of Thai lenders Bangkok Bank PCL, SiamCommercial Bank PCL, KASIKORNBANKPCL and Krung Thai BankPCL admitted that lowering the interest rate affects their banks' income,Manager Daily reported.The executives added that they will look for other sources of income and try tocontrol costs.

* Indonesian Finance Minister Bambang Brodjonegoro said the economyis projected to have grown more than 5% in the first quarter, fueled by domesticconsumption, Indonesia's Antara News Agency reported.

* Indonesia's Infobankreportedthat PT Bank Mandiri (Persero) Tbkrecorded e-commerce transactions of 1.013 trillion rupiah in the first quarter,2x the amount recorded in the prior-year period.

* The Malaysian government named Muhammad Ibrahim the new governor of , succeeding Zeti AkhtarAziz. Ibrahim will serve as head of Malaysia's central bank for a period of fiveyears, beginning May 1.

* Malaysian bankers expect that the new governor of Bank NegaraMalaysia will continue the policies of his predecessor, Bernama reported.

SOUTH ASIA

* A sharp decline in aggregate deposits and credit forwardedby lenders was observed in the first two weeks of fiscal 2016-2017 as window dressingdone in the balance sheets of lenders have started to reverse, The Economic Times of India reported,citing data from the Reserve Bank of India. 

* India's private life insurers saw slight growth in insurancepremium income for fiscal 2015-2016 with an adjusted premium equivalent increaseof 14% year on year, The Times of Indiareported.

* Lakshmi VilasBank Ltd.'s profit went up 22.5% year on year in the fourth quarterof fiscal 2015 in its small and medium-sized enterprise lending and retail businesses,The Times of India reported.

AUSTRALIA AND NEW ZEALAND

* Australia and New Zealand Banking Group became the first Australianbank to support Apple Pay, a digital wallet service by Apple Inc. that provides mobile payment services, Reutersreported,citing executives from the companies.

* A highly competitive market and falling interest rates havecaused a fall in profits in New Zealand's banking sector, the New Zealand Herald reported,citing a KPMG survey.

IN OTHER PARTS OF THEWORLD

* Bank of New YorkMellon Corp. is in talksto buy DBV-X, in a move that would see it enter Europe's repurchase trading scene.

* Greek banks recorded a dropin their overall deposits in March for the third month in a row, data from the showed.

* Former BTG PactualGroup CEO André Esteves told employees at the bank's headquarters inSão Paulo that he will be returningto the company, although his exact role is unclear, Bloomberg News reported, citingsources with knowledge of the meeting.

* The FDIC, acting in its capacity as receiver for a San Juan,Puerto Rico-based bank that failed nearly six years ago, filed a federal breach-of-contract lawsuit against a subsidiary to recover damagesthe agency said stem from the insurer's alleged failure to perform under two fidelitybonds.

Sally Wang, Jonathan Cheah,Jaekwon Lim and Santibhap Ussavasodhi contributed to this report.

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