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Biweekly Country Updates
The following is our selection of the most important local developments at country level, collated once every two weeks.
Country Updates, April 23rd 2012
Regional/ International The IMF has stated that European banks could be forced to sell as much as $3.8 trillion in assets through 2013 and curb lending if governments fall short of their pledges to stem the sovereign debt crisis or face a shock their firewall can’t contain. A majority of Citigroup shareholders voted against chief executive officer Vikram Pandit’s proposed compensation package amounting to $15 million. The vote came amid widespread outrage about executive pay, and in light of Citi’s own shaky performance in the market.
The Kuwait Finance House-Bahrain has been awarded the JP Morgan Outstanding Payments Quality Certificate 2011 in recognition of its commitment to quality in the area of fund transfer. Islamic bank Warba has signed two major agreements with Standard Chartered to facilitate its transactions in Asia, joining Standard Chartered’s Asia Express guaranteed payments programme as well as signing the RMB clearing services agreement. HSBC Holdings will combine its Omani division with Oman International Bank and plans to inject up to $97.4 million into existing Oman operations in a deal which will see HSBC control 51% of the combined bank, to be named HSBC Oman.
The Central Bank of Myanmar has signed a memorandum of understanding with the Tokyo Exchange Group pertaining to the establishment of a securities exchange and a capital market in Myanmar. ANZ Royal Bank chief executive Damian Bell has resigned from the post he held for not much more than a month, having joined from ANZ Laos in February to replace former head Stephen Higgins.
South Korea’s Woori Bank launched its first branch in Chennai, India and will assist in corporate banking with focus on Korean companies present in India. The Reserve Bank of India will issue guidelines to allow power companies to raise such funds by retiring their rupee debt with Indian banks, with the liberalisation of external commercial borrowing norms for the lagging sector. The Securities and Exchange Commission of Pakistan has issued a prohibition order against Faysal Bank after obtaining evidence that the bank was involved in manipulating prices of stocks.
Court Theatre chief executive Philip Aldridge has been enlisted by BNZ to head its Canterbury branch of its business service network to pool resources for small-medium sized firms as well as boost the bank’s business customer list. 26-year-old merchant banking company Bancorp New Zealand has declared that it has no connection or association with the investment company, First International Bancorp that the Reserve Bank had singled out for criticism for claiming legitimacy under a non-existent New Zealand legislation. Kiwibank is considering expanding into New Zealand’s foreign exchange market, and has released a request for information through the GETS website to identify suitable service providers and investigate the market for FX pricing and risk management platforms.
Commonwealth Bank of Australia plans to launch a new branch in Beijing to boost its Yuan-denominated offerings and trade finance capabilities, while expanding its existing partnerships with regional banks. Chinese banks have been ordered by the Ministry of Finance to turn in more provisions to cover possible rises in loan impairment in a move to tighten the banking sector’s risk prevention and control. The Industrial Bank of Taiwan has opened its first representative office in Tianjin, China. The branch is to act as a bridge between the bank’s headquarters in Taiwan and the business circles in Taiwan with an eye on increasing the number of Taiwanese investors in northern China.
Singapore’s Temasek Holdings has purchased a $2.3 billion stake in the Industrial and Commercial Bank of China, buying 3.55 billion Hong Kong-listed shares from Goldman Sachs. Bank of China and China Construction Bank have received regulatory approval for their rights issue plans as Beijing encourages banks to bolster their capital reserves after 2011’s lending boom. The SFC will launch a public consultation which seeks to toughen rules for banks sponsoring initial public offerings, including holding them liable for faulty deal documents.
Bank Danamon Indonesia has disbursed $54 million in loans to Yamaha Indonesia to enable Yamaha to offer its dealers loans with flexible collateral requirements and competitive lending rates. Indonesia’s ANZ Bank has agreed to lend $65 million to state port operator Pelabuhan Indonesia III to help finance a new port at Teluk Lamong in Surabaya, in an effort to boost infrastructure loans.
Morgan Stanley is seeking to hire five more people for its over-the-counter derivative clearing operations in Japan in a bid to boost fee income and lure new clients ahead of tougher regulations. Japan's securities regulator will seek penalties against the country's third-largest broker Nikko SMBC Securities after finding that found several sales staff at Nikko tipped off clients ahead of the official announcement of share offerings by its parent, Sumitomo Mitsui Financial Group. Nomura has hired Tim Owens as global head of foreign-exchange structuring of products including structured notes. Owens joined the Japanese bank last week from JP Morgan, where he worked for about 18 years.
HSBC is holding talks with several investors over the potential sale of its South Korean assets as chief executive Stuart Gulliver looks to shore up the bank's balance sheet. HSBC has 11 retail banking and wealth management branches in South Korea, which handle assets worth around $26.2 billion. The Financial Services Commission is planning to tighten rules on issuing credit cards as abusive card issuance has boosted excessive household spending relative to income. Credit card firms will be required to assess potential card holders' settlement capability based on disposable income rather than nominal income.
The Export-Import Bank of Malaysia has entered into a strategic partnership with Al Rajhi Bank Malaysia to assist the country’s small and medium enterprises and corporations to expand overseas, particularly in the Middle East. CIMB Group and RBS have entered into a Cooperation Agreement (CA) to confirm their mutual understanding to explore cooperation in various areas of business, including potential collaboration in capital markets activities, mergers and acquisitions, and more. Maybank has hired former Citigroup head of mergers and acquisitions for Southeast Asia Giles Ong to build its investment banking and advisory business. Ong will be overseeing the company’s corporate finance, debt markets, equity capital markets and advisory business. CIMB has been invited by Pakistan’s High Commissioner to Malaysia to explore expansion opportunities in Pakistan, particularly in Islamic banking.
The Bankers Association of the Philippines announced the election of Alberto Villarosa, president and chief executive of Security Bank Corporation, as the banking industry’s association new president for 2012-2013. Ayala-led Bank of the Philippine Islands is taking steps towards the early adoption of the stringent capital adequacy ratio requirements under the Basel III global framework but sees no need to raise fresh capital in the next three years.
OCBC’s new chief executive officer, Samuel Tsien, aims to boost the company’s revenue from China and Indonesia, although he declined to comment on what proportion of revenue he’s targeting from the countries or a timeframe. Temasek Holdings is buying part of Goldman Sach's stake in Industrial & Commercial Bank of China – a total of 3.55 billion shares, or 4% of the Hong Kong-traded shares in the world's biggest bank by market value. Citigroup’s Singapore unit was countersued by Raghavendran Rajaraman, who claimed the bank breached an agreement by prematurely selling his gold assets held as collateral and closing his trading account.
Chinatrust Commercial Bank, the largest issuer of credit cards in Taiwan, yesterday signed a memorandum of understanding for strategic cooperation with China UnionPay, an association for China's banking card industry, to jointly operate a range of cross-Taiwan Strait and international financial services.
Kasikornbank has signed a loan agreement for 2.8 billion baht ($90.6 million) to the Japan Bank for International Cooperation to assist flood-hit Thai-Japanese ventures. Under this agreement, loans of up to 100% of investment value will be granted for seven years at a special lending rate of 4-5% with no interest for the first year. Bank of Thailand has reported a considerable drop in the monthly credit card usage for February 2012 despite an increased number of credit cards issued, especially by non-bank providers.
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