Financial Industry 07 (Jul 18 - Dec 24)

[winston]

China: Banks Stress Test by DBS

Source: SCMP

https://www.scmp.com/business/banking-f ... s-bank-ace

[winston]

Singapore to allow virtual banks as part of move to open up market

* Digital bank licences mark liberalisation in sector
* Singapore to initially offer two digital full banklicences
* Asia's non-banking firms keen to challenge traditionalbanks
* Hong Kong began issuing licences earlier this year

By Anshuman Daga SINGAPORE, June 28 (Reuters) - Singapore's central bankplans to issue up to five digital bank licences to suitable applicants, in a move that could deliver the biggest shake-up in two decades in a market dominated by local banks.

"The new digital bank licences mark the next chapter in Singapore's banking liberalisation journey," said Tharman Shanmugaratnam, senior minister and chairman of the Monetary Authority of Singapore (MAS).

"We welcome firms with innovative value propositions to apply for the digital bank licences, even if they have not yet established a track record in banking," Shanmugaratnam said at an annual event of the Association of Banks in Singapore.

Asia's non-banking firms are keen to challenge traditional banks by leveraging their technology and their user databases to offer banking services to retail customers and small businesses.

Singapore's banking market is dominated by DBS Group Holdings Ltd , Oversea-Chinese Banking Corp and United Overseas Bank Ltd .

Earlier this month, Reuters cited sources as saying that ride-hailing company Grab is close to hiring a consultancy to advise it on its banking potential and is gearing up to apply for a digital-only bank licence in Singapore.

Global financial technology players are among other groups expected to seek licences in Singapore, with some of them looking to form joint ventures, Reuters reported.

"The far-reaching effects of digitalisation are stimulatinga fundamental re-think of the role of banks, in most advanced financial centres," Shanmugaratnam said.

"We are starting with two digital full bank licences, so as not to fragment Singapore's small domestic retail banking market," he said.

MAS expects to invite applications in August.

Shanmugaratnam said a digital full bank will start as a restricted digital bank to build up its business model and internal processes, and gradually progress to become a full functioning full bank.

Hong Kong, Singapore's fierce financial centre rival, began issuing licences earlier this year. In Hong Kong, affiliates of Alibaba Group Holding Ltd and Xiaomi Corp <1810.HK>, and consortia led by Standard Chartered PLC and BOC Hong Kong Holdings Ltd<2388.HK> were among those who won the digital-only bankinglicences.

The MAS said in a statement that it will issue up to two full digital bank licences to companies headquartered in Singapore and controlled by Singaporeans.

Foreign firms are eligible for these licences if they form a joint venture with a Singapore company, and the venture meets the headquarter and control requirements.

The central bank will also issue up to three digital wholesale bank licences which will be open to both local and foreign players.

Digital wholesale banks will not be allowed to take Singapore deposits from individuals, except for fixed deposits of at least S$250,000 and will be permitted to maintain deposit accounts for corporate and small and medium enterprises.

Source: Reuters

[behappyalways]

Banks Near Zero Hour on $124 Trillion of Flows
https://www.bloomberg.com/opinion/artic ... r-payments

[winston]

China Banks Are Valuation Traps

Source: SCMP

https://www.scmp.com/business/markets/a ... banks-lose

[winston]

HK: Banks slump after Morgan Stanley downgrade

by Kevin Xu

Hong Kong banks declined after Morgan Stanley cut their outlook.

Bank of East Asia (0023) slumped 4.5 percent to HK$18.16, while Hang Seng Bank (0011) lost 3.3 percent, closing at HK$159.80.

Morgan Stanley reduced its recommendation on the industry to cautious. It cut Hang Seng Bank and HSBC Holdings to underweight.

"We would continue to avoid the segment," analysts including Anil Agarwal wrote.

"The economy is slowing fairly quickly...with almost all key indicators meaningfully down year on year. This will pressure earnings in the second half and beyond."

Meanwhile, Bank of China's (3988) Macau Branch was expected to price a floating-rate note tied to the Secured Overnight Financing Rate yesterday. It would be the first foreign-currency bond from a Chinese issuer linked to the SOFR.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 1010&sid=2

[winston]

How did the US banks look in the third quarter?

We've had positive earnings surprises for Citi, JPM and Bank of America for an average year-over-year earnings growth of 14%. That is strong.

Wells Fargo was the outlier, missing on expectations, as it took some pain preparing for a new CEO to start next Monday.

The earnings strength from the major banks (three of the major banks, in the case of the third quarter) follows 21% average year-over-year EPS growth from the big four in the second quarter.

Again, the consumer has not faded, despite a nine month public debate over recession cues.

Source: Forbes

[winston]

Falling interest rates

Banks borrow money at low short-term interest rates then lend at higher long-term rates.

The difference between these two rates is called the "interest rate spread."

Rates have been falling in recent months. This is bad for banks, since a thin spread eats into profits.

Source: Investor Place

[winston]

Banks are hitting new all-times highs

Bank earnings this quarter were better than expected, despite lower rates. What's happening here?

First, most of the major money-center banks like Citigroup (C), Bank of America (BAC) and JPMorgan (JPM) reported windfall profits from bond trading and wealth advisory services this quarter.

Low interest rates along with positive hiring and salary trends has kept the consumer part of the U.S. economy very strong. This has been good for retail, tech, and banking because U.S. economic GDP is more than 70% consumption.

Demand for financing from consumers has been a source of bank fees and charges that helped offset the damage from low interest rates.

Source: Investor Place

[winston]

not vested

China Banks: Good times may soon be over

Source: SCMP

https://www.scmp.com/business/companies ... argins-are

[behappyalways]

Banks brace for biggest job cuts since 2015
https://www.theedgesingapore.com/news/l ... -cuts-2015