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CCB to inject US$200M in Brazilian unit; 1MDB directors offer to quit en masse


Banking Essentials Newsletter: 23rd August edition


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Banking Essentials Newsletter: 9th August Edition


Navigating Industry Level Credit and Market Risks in the Light of Slow Growth and Interest Rate Hikes

CCB to inject US$200M in Brazilian unit; 1MDB directors offer to quit en masse

*China Construction BankCorp. is seeking authorization from the China Banking RegulatoryCommission to inject US$200 million of capital in troubled Brazilian unitChina Construction Bank (Brasil)Banco Múltiplo SA, ValorEconômico reported. The move follows two consecutive years oflosses for the Brazilian subsidiary, which led to its Tier 1 capital ratiofalling to well below the minimum regulatory requirement.

*Pahala Mansury, finance and strategy director at , saidthe Indonesian lender expects its offshore business units, led by its Chineseand Singaporean units, to book higher growth than domestic operations thisyear, partly due to the reduced presence of foreign banks in Asia, The Nikkei reported.

*1Malaysia Development Bhd.'s entire board of directors offered to resign aftera parliament inquiry recommended that the fund's top management face criminalinvestigation, The Wall Street Journalreported.


*Fitch said it maintains a stable outlook on China's A+ rating and it expectsChinese economic growth to be between 6% and 6.5% for 2016 and 2017, Shanghai Securities News reported.However, the rating agency warned that rising leverage is a mounting source ofsystemic vulnerability for the economy.

*The total number of people who sell insurance products in China increased 41%to 7.1 million as of the end of the first quarter, the Securities Daily reported.However, the industry also had a high demission rate of 34.25% in 2015.

*Alexander Ivanov Batchvarov, managing director of international structuredfinance at Bank of America Merrill Lynch Global Research Center, said China'scollateralized loan obligations market has expanded rapidly, which may incurrisks, Caixin reported.China's asset-backed securitization products surged to 405.63 billion yuan in2015 from 280.3 billion yuan in 2014. CLO products accounted for more than 77%of ABS products in China in both 2014 and 2015.

*The People's Bank of China will release data on its foreign exchange reservesdenominated in Special Drawing Rights starting April, Reuters reported.The central bank said having the SDR as a reporting currency for foreignexchange reserve data will help cut valuation changes caused by frequent andvolatile fluctuations of major currencies.

*HSBC Holdings Plc CEOStuart Gulliver said global markets have overstated the risks posed by Chinaand underestimated the country's ability to continue reforming its economy,London's Financial Times reported.China's size means its progress would not follow the same pattern and samelimitation as other emerging markets, Gulliver noted.

*Taiwan's Directorate-General of Budget, Accounting and Statistics said theisland's consumer price index rose 2% in March year over year, as cold weathercontinued to drive up food costs, the TaipeiTimes reported.


*Mizuho Bank Ltd. haskept its yearly prime interest rate on business loans at 0.95%, reflecting thelatest trend of long-term interest rates in the market, The Sankei Shimbun reported.

*Sumitomo Mitsui BankingCorp. has received approval from the Myanmar government to open alocal office in the Thilawa special economic district, where and havealso set up their offices, The Nikkeireported.The company is looking to open the office in July.

*Bank of Japan Governor Haruhiko Kuroda said the central bank will implementadditional quantitative, qualitative and interest rate policies if deemednecessary, The Nikkei reported.Kuroda said that despite the slowdown in emerging markets, Japan's economy isrecovering moderately.

*South Korea's WooriBank introduced a system called WeBus, a portable bank officeretrofitted inside a bus, The FinancialNews reported.The bank plans to expand this service.

*South Korea's Financial Supervisory Service said consumers will be able tocompare the features and functions of credit cards and debit cards through itswebsite, the Korea Economic Daily reported.

*Korea DevelopmentBank completed the sale of a package of a 43% stake inKDB Daewoo Securities Co. Ltd.and the whole of KDB AssetManagement Co. Ltd. to a consortium of andMirae Asset Global InvestmentsCo. Ltd.


*The Bank of Thailandsaid deposits grew at a faster pace than loans in February, Post Today reported. On ayear-over-year basis, outstanding deposits expanded by 5% to 17.48 trillionbaht while loans grew 4.8% to 16.12 trillion baht at the end of the month.

*Thailand's Post Today reported thatBank for Agriculture &Agricultural Co-operatives is preparing to register low-incomeearners in line with a policy by the Finance Ministry. The Thai government isaiming to help those in urgent need through welfare programs and subsidies.

*KASIKORN Research has maintained its 2016 GDP growth projection at 3%, or arange of 2.5% to 3.5%, thanks mainly to the Thai government's economic stimulusmeasures, Post Today reported. However,many risk factors, including drought, weak exports and slower-than-expectedgrowth of private investment remain causes for concern.

*Bank Mandiri said it received a license for making yuan-denominatedtransactions in China, Kompas reported,citing Pahala Mansury, Bank Mandiri's treasury director.

*PT Bank Central AsiaTbk appointed Sumantri Slamet as an independent commissioner,pending approval of the Indonesian Financial Services Authority, Bisnis Indonesia reported.

*Macquarie Group assisting several foreign financial institutions interested in startingM&A talks with Philippine insurance firms and will initially invest up toUS$50 million, The Philippine Star reported,citing "sources close to the parties involved."


*The Reserve Bank of India said it penalized Panihati Cooperative Bank Ltd. in WestBengal, India, for violating anti-money laundering measures.

*IIFL Holdings Ltd. saidGeneral Atlantic Singapore Fund Pte. Ltd. completed its acquisition of 21.61%of equity shares in unit IIFL Wealth Management Ltd. on a fully diluted basis.

*Small Industries Development Bankof India signed a memorandum of agreement with to aidthe Indian government's push of its fund-of-fund operations for the venturefund sector, The Hindu Business Line reported.


*Fitch Ratings said"the increased regulatory scrutiny on conduct and culture" facingAustralia's banks may lead to possible fines, class-action lawsuits, increasedregulatory oversight and remedial action.

*Bank of QueenslandLtd. hiked its variable rates for owner-occupied loans by 12 basispoints to 5.86% and for investor loans by 25 basis points to 6.28%, effectivefrom the end of the week of April 11, TheAustralian reported.


*The Basel Committee on Banking Supervision has a consultative document on theBasel III leverage ratio framework, proposing changes to the treatment ofderivatives and outlining how the world's largest banks may have to meetadditional requirements.

*Swiss Financial Market Supervisory Authority FINMA CEO Mark Branson lenders to "domore" to combat money laundering, following the leak of files fromPanama-based law firm Mossack Fonseca.

*Itaú Unibanco HoldingSA Vice President Ricardo Marino said the company is interested inCitigroup Inc.'sassets in Latin America, El Economistareported.

*Paris-based BNP ParibasSA is planning to launch an IPO of subsidiary as early as June, The Wall Street Journal .

Sally Wang, Sarun Saelee,Cathy Hwang, Emi White and Aditya Suharmoko contributed to this report.

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