SAFE eases regulations for special economic zonesMay 24, 2013China's State Administration of Foreign Exchange (SAFE) announced that it will ease regulations of foreign currency transactions for firms operating in special economic zones in the country. The simplified regulations now allow companies to take legal profits derived from exports out of the country, as long as they are located in special economic zones. The new rules, which will take effect in June, will also cut down paperwork requirements and reduce the frequency of regulatory checks.
BOC profits hit by bad loans in H1Aug 20, 2014
The Bank of China Ltd revealed that bad loans have upset their profit increase in H1 of this year. The BOC, China's fourth-biggest bank, is the first of the country's largest state-controlled banks to come out with their H1 results. According to BOC, its net profit from January to June was at Rmb89.72bn (USD14.6bn) -- an 11% rise year-on-year, or slightly more than the Rmb89.56bn (USD14.58bn) median forecast of six analysts that The Wall Street Journal polled.
China LEI registration system goes onlineAug 19, 2014
The People's Bank of China made an announcement on 18 August that an online system for the Legal Entity Identifiers' registration is now fully operational. The LEI system is a proposal of the Financial Stability Board -- central bankers and finance ministers from the world's biggest economies who pooled their resources after the worldwide financial crisis in 2008. The LEI is a unique ID that legal groups involved in international financial transactions can utilise to enhance integration and cut down on risks.
Foreign banks report double-digit profit growthAug 18, 2014
Foreign-invested banks in the country enjoyed double-digit profit growth in the first six months of the year, China Business News reported. Leading the pack is Charter Bank, which reported pre-tax earnings of USD193m, a 65% growth year-on-year. HSBC followed suit with a profit of USD566m, a 64% pre-tax year-on-year growth. Hang Seng Bank registered a 26.4% with USD21m while Bank of East Asia's pre-tax year-on-year profit growth hit 25% to reach USD198.7m. Liang Guowei, head of banking and capital markets for PricewaterhouseCoopers China, said the profit was mostly generated from activities derived from industrial cross-border trade as well as gains from retail earnings and business loans.
China's top 5 banks in bond offering spreeAug 15, 2014
China's top five banks - China Construction Bank (CBC), Agricultural Bank of China (AgBank), Bank of Communications (BOCOM), Industrial and Commercial Bank of China (ICBC), and Bank of China (BOC) - are set to raise Rmb128bn (USD20.8bn) in a two-week bond offering spree. The flurry of offerings, analysts said, shows Chinese regulators have signed off on the giant deals despite their potential drain on market liquidity, and are comfortable with the new Basel III-compliant bond structure. CBC and AgBank plan to raise Rmb50bn worth of Basel III-compliant Tier 2 capital via domestic bond issues while BOCOM plans to raise Rmb28bn. ICBC and BOC together offered Rmb50bn of bonds last week.
Chinese households invest USD2.1tr in wealth-management productsAug 15, 2014
China Banking Wealth Management Registration Systems said that Chinese households have invested a total of USD2.1tr of their savings into wealth-management products. The latest figure shows that more Chinese household savers are looking at the 5.2% annualised return offered by wealth products compared with the 3% for benchmark one-year deposits. Wealth-management products are also less risky compared with trust products, said one analyst. Wealth-management products typically require a minimum investment of Rmb50,000 (USD8,130).
China Mobile reports H1 profit dropAug 14, 2014
Stiff competition in the world's largest mobile market has resulted to the 8.5% year-on-year drop of China Mobile's net profit in the first six months of this year. China Mobile, the world's largest wireless network operator, said its H1 net profit was Rmb57.7bn (USD9.37bn), which pales in comparison to the Rmb324.7bn (USD52.75bn) net profit from the same period last year. Aside from the increasingly saturated market, China Mobile also attributes its profit drop to some government policies.
USD3.57bn treasury bonds issued in AugustAug 14, 2014
The Ministry of Finance announced that the country has issued Rmb22bn (USD3.57bn) in one-year book-entry treasury bonds. Interest rate for the bonds will be fixed at 3.82% after competitive tendering and interest calculation begins in 14 August, the statement said. The bonds will be sold on the interbank market until 18 August and will become tradable on the secondary market on 20 August. Both the interest and the principal will be paid upon maturity on 14 August 2015. This is the ministry's 18th issuance of book-entry treasury bonds this year.
China's new yuan loans decline sharply in JulyAug 13, 2014
China's banks lent far less money than expected as new yuan-denominated lending stood at Rmb385.2bn (USD62.6bn) in July, down sharply from Rmb1.08tr (USD175bn) in June and well below expectations of Rmb727.5bn (USD118bn), central bank data showed on Wednesday. The PBOC attributed the plunge in new yuan loans partly to the weakening demands for loans amid downward pressures for economic growth and a cooling property market. M2, a broad measure of money supply, increased 13.5% to Rmb119.42tr (USD19.38tr) last month from a year earlier, the People's Bank of China said in a statement on its website, lower than the 14.4% growth forecast.
Alibaba to sell its SME loan biz for USD518m to Alipay's parent firmAug 13, 2014
China's Alibaba Group Holding Ltd redesigned its deal with the parent company of its payments affiliate Alipay, greatly boosting the Chinese e-commerce giant’s revenues if Alipay is acquired by another firm or conducts an initial public offering. Alibaba itself is about to hold an IPO in New York this year. It agreed to unload its small and medium enterprise (SME) loan business for USD518m in cash to Small and Micro Financial Services Co — the parent company of Alipay.
Tencent, Hillhouse forms private equity JVAug 13, 2014
Chinese Internet giant Tencent Holdings Limited is set to establish a private equity JV with Asia-focussed hedge fund Hillhouse Capital Management, according to Chinese media reports. Tencent and Hillhouse Capital will each contribute 40% and 60% of the fund's capital, respectively. It is still unclear how much capital the fund will try to raise. The JV will appoint Qiu Guolu, former investment director of China Southern Fund Management, as chairman of the fund, while Hillhouse Capital's founder Zhang Lei will be the fund's general manager. This is not the first time Tencent and Hillhouse Capital have worked together. Last February, the two joined Indonesian media company MNC Media to establish a JV to tap into the social media market opportunities in Indonesia.
WH Group's Smithfield's Q2 profits quadrupleAug 13, 2014
Smithfield Foods, the US-based pork producer that China’s WH Group, formerly Shuanghui International Holdings, has acquired, revealed that its Q2 profits quadrupled due to an increase in hog prices and a greater demand all over the world. Smithfield Foods reported a record net income of USD142.9m from April to June. It was at only USD32.4m at the same period in 2013. Smithfield's sales went up 14% to USD3.8bn.
China Re eyes USD2bn IPO in Hong KongAug 12, 2014
China's leading reinsurer, China Reinsurance Corp (CRC), is planning to list in Hong Kong with the aim of raising USD2bn, the Wall Street Journal reported. The report said CRC has hired HSBC Holdings Plc and UBS AG to prepare for the IPO that is to be launched in the first half of 2015. China Re's listing plan comes amid Beijing's campaign to make its rigid state-owned enterprises more transparent. China Re, whose businesses span from life reinsurance to wealth management, has a near monopoly on the domestic reinsurance market.
China's July fiscal revenue declinesAug 12, 2014
The fiscal-revenue growth of China in July went up just 6.9% year-on-year to Rmb1.27tr (USD206.5bn), in sharp contrast to the 8.8% increase in June. According to China's Ministry of Finance on 11 August, fiscal spending likewise slowed down in July, because national fiscal expenditures rose 9.6% to Rmb1.03tr (USD170bn), falling from a 26.1% upsurge in June. From January to July this year, fiscal revenue increased 8.5% year-on-year to Rmb8.73tr (USD142bn).
Deutsche Bank files lawsuit vs. ex-exec for 'illegal' account transfer in ChinaAug 12, 2014
Germany's Deutsche Bank AG sued Zhang Lee, who used to be one of the bank's highest-placed executives working on its Asian operations. Deutsche Bank is asking for USD3.9m, which it says was transferred illegally from the bank to a firm's account at a bank in China. Zhang was the Deutsche Bank China chairman and head of international banking in the Asia-Pacific, before he quit and joined Industrial & Commercial Bank of China Ltd in 2010.
Yuan deposits of non-residents hit Rmb1.47trAug 11, 2014
The State Administration of Foreign Exchange (SAFE) said deposits of non-residents in China reached Rmb1.47tr (USD238.78bn) by the end of June this year. Of the total non-resident deposits, around Rmb532.4bn (USD86.5bn) came from individuals. China started publishing non-resident deposit figures last year to make foreign exchange statistics more transparent. In July, new deposits at China's "big four" banks fell by Rmb1.5tr (USD240bn), from a Rmb2.2tr (USD357bn) growth in June, the Shanghai Securities News reported.
Accenture hit by China anti-monopoly investigationAug 7, 2014The anti-trust probe of China that first targeted Microsoft Inc has expanded, now including American firm Accenture. On 6 August, one of Accenture's offices in China was investigated. According to a statement by the State Administration for Industry & Commerce, it made a visit to the Accenture office in Dalian City in Liaoning Province. The state agency added that Accenture was included because it is the financial service outsourcer of Microsoft China Co.
Deposits, loans at China's big four banks decline by USD243bnAug 6, 2014
The yuan deposits at China's big four banks declined by Rmb1.5tr (USD243bn) in July, following a Rmb2.2tr (USD356bn) increase in June while new loans dropped to Rmb210bn (USD34bn) from Rmb290bn (USD47bn) during the same period. Analysts, however, were quick to say that the declines should not be a cause for concern because these were mainly triggered by seasonal factors. In June, the Chinese bank regulator assesses the first half financial performance of banks, prompting banks to set the maturity date for wealth management products around the end of the month so that clients will deposit the money back in the banks.
China Life to inject USD250m in PE firm TPGAug 6, 2014
China Life, the world's largest life insurer by assets, is reportedly investing up to USD250m into private equity group TPG, one of the industry's largest private groups. The size of the stake that China Life will take is yet to be released although some reports have suggested that the insurer will take a stake of between 2% and 5%. Both China Life and TPG declined to comment. Analysts said the investment will help both firms gain access to each other’s market and expertise.
UBS to provide futures brokerage services in ChinaAug 6, 2014
UBS Securities Co announced it has set up a new subsidiary in Shanghai to provide futures brokerage services, in the latest bid to diversify its business portfolio in China. UBS Futures Co, the new entity, was established following the competition of the acquisition by UBS of a 95.42% stake in Shanghai Pumin Futures Brokerages Co. With a registered capital of Rmb120m (USD19.4m), the company will engage in commodities futures broking services for institutional investors.
Mobile phone payments up 707%Aug 4, 2014
The 2014 China Internet Financial Development Report showed that payments made through mobile phones in the country rose 707% year-on-year in 2013. The report, published by the Internet Society of China (ISC) and Finance World, said payment transactions made through mobile phones reached 125 million last year. As mobile phone payments continue to rise in China, ISC Deputy Secretary General Shi Xiansheng urged an improved technology to safeguard mobile payments, which he said has been vulnerable to smartphone bugs.
China equity markets' best performance since December 2012Aug 1, 2014The equity markets of China performed its best in July since the previous high in December of 2012. This raised the Shanghai Composite Index by 7.48% with a 0.93% boost on 31 July to close on top of the vital 2,200-point level. The Shenzhen Component Index likewise went up 1.32% to close at 7,956.91 points for an 8.36% rise. These robust performances by both stock markets in July have also raised hopes that the country's economy is on the road to genuine recovery.
China's 2013 credit-card transactions hit USD2.1trAug 1, 2014The credit-card transactions in China reached Rmb13.1tr (USD2.1tr) last year — a 30.9% rise year-on-year. According to a report that the China Banking Association released on 31 July, transactional value comprised 55.8% of all retail sales of consumer products. China issued 61 million new credit cards throughout 2013, warning that potential credit hazards come with it. Delayed credit-card repayments that reached over six months increased 71.9% year-on-year to Rmb25.19bn (USD4.08bn) last year.
Regions allowed to set up firms that will buy bad loansJul 30, 2014
The China Banking Regulatory Commission (CBRC) has allowed five regions in China to create asset management companies to buy bad loans. The trial program includes Shanghai, Guangdong, Zhejiang, Jiangsu and Anhui. The regulator picked the five local governments as they have been witnessing a significant surge of non-performing loans or have experience in asset management practices, in the cases of Shanghai, Guangdong and Zhejiang, analysts said. The program is part of CBRC's efforts to prevent the escalating local bad debts from crippling the economy.
China launches asset management trialJul 29, 2014
The China Banking Regulatory Commission (CBRC) has approved the first batch of asset management firms to buy non-performing financial assets, the local Anhui Daily reported. The firms are based in Shanghai and four provinces — Jiangsu, Zhejiang, Anhui and Guangdong. They have been allowed to conduct assets transfer business within the local area, the report said.