The most significant positive news from China is that it appears to be increasingly on top of its efforts to combat shadow-banking in the country. “At the beginning of the year, authorities made it clear that the risks from shadow-banking and cross-industry financial businesses will be included in this year’s main subjects for rectification,” said Sheng Songcheng, an advisor to the People’s Bank of China (PBOC). Indeed, figures show that the size of new trust loans and new entrusted loans fell by 131.5 billion yuan and 179 billion yuan month-on-month in January respectively, with Sheng Songcheng noting that further month-on-month declines were recorded in the ensuing months.
According to the China Banking and Insurance Regulatory Commission, moreover, interbank assets declined by 2.6 percent year-on-year at the end of May, while non-bond investments fell 7 percent. The value of interbank wealth-management products also declined by 1.2 trillion yuan (US$177 billion) during the first five months of 2018, following a drop of 3.4 trillion yuan last year. Regional lenders in China remain a distinct risk to the sector’s stability, however.
Japan’s top financial regulator, the Financial Services Agency (FSA), has launched onsite inspections of the country’s regional banks in a bid to verify that internal auditing is properly functioning. According to recent reports, the FSA has decided to move on the issue, having taken action against a regional Japanese lender after it was revealed that it had engaged in improper conduct, including charging customers illicit commissions on top of interest on loans due to lack of adequate internal auditing.
The FSA is also expected to broaden the scope of its inspections, although the banks being targeted remain unknown at this stage. With banks under pressure from negative interest rates and tight margins, regulators are now pressing for stronger internal auditing in order to ensure that management can be sufficiently monitored.
Singaporean banks are anticipating a marked slowdown in home loans following recent measures taken to cool the housing market. That said, banks still expect that most of their current mortgage books should stay intact for the remainder of the year. DBS Bank, which is the country’s biggest mortgage provider with a 31-percent share of the housing-loan market, has cut its property-loans growth forecast by S$1 billion. DBS CEO Piyush Gupta said the bank had originally anticipated putting on about S$4 billion consumer mortgages. UOB’s (United Overseas Bank’s) chief, Wee Ee Cheong, meanwhile, believes housing prices could fall by as much as 5 to 10 percent, while home-loans activity should also fall.
Australian banking news continues to be dominated by the Banking Royal Commission. Most recently, the inquiry has turned its attention to superannuation; and after a week of evidence coming to light, National Australia Bank (NAB) issued an apology for attempting to prevent the publication of correspondence between the lender and corporate regulator. The exchanges occurred last year during which the regulator accused NAB of more than 100 potentially criminal counts of breaches of its licence, relating to charging fees to superannuation customers for services not provided. Fees had also been deducted from those super accounts whose owners had died. In addition, NAB is required to pay more than $100 million to super customers as compensation for being charged a “plan service fee” for general advice, despite now having advisers linked to their super accounts.
The good times for New Zealand’s banking sector might also be coming to an end shortly. According to Moody’s, the end is nigh for the banks’ run of record-breaking profits as margins continue to come under pressure. Although the assessment comes shortly after ASB Bank posted a 10-percent rise in annual profit to a record-breaking $1.17 billion, Moody’s Vice President of Investor Services Daniel Yu argues, “It’s hard to see, with the competitive pressures, how profitability can get any better, and there is probably some pressure because of the lower credit growth environment”.
Reserve Bank of New Zealand (RBNZ) data shows that major retail banks ASB Bank, BNZ (Bank of New Zealand), Westpac and ANZ (Australia and New Zealand Banking Group) made a combined profit of $4.9 billion in the year-to-December 2017, which is substantially more than the $2.8 billion they notched up 10 years prior. But Yu cites mounting pressure on funding costs and more competitive pressure as being restrictive on future bank profits. “I don’t think you’ll see profits go backward; I think you’re just going to see a much slower rate of profit growth going forward.” Yu also believes the “sweet spot” for the sector was between 2012 and 2014.
>>>ASIA AWARD WINNERS
BANKING CEO OF THE YEAR
Asia
Mr. Edwin R. Bautista
Union Bank of the Philippines
**********
BEST CUSTOMER SERVICE
PROVIDER OF THE YEAR
Asia
Siam Commercial Bank (Thailand)
**********
Best Banking Group China
CCB Group
Best Banking Group Japan
Mizuho Financial Group
Best Banking Group Singapore
OCBC Group
Best Banking Group South Korea
Shinhan Financial Group
Best Investment Bank Of The Year China
China International Capital Corporation (CICC)
Best Investment Bank Of The Year India
Kotak Mahindra Capital
Best Investment Bank Of The Year Japan
Daiwa Securities Group
Best Investment Bank Of The Year Malaysia
Maybank Investment Bank
Best Investment Bank Of The Year Pakistan
HBL
Best Investment Bank Of The Year South Korea
Mirae Asset Daewoo
Best Commercial Bank Of The Year Bangladesh
BRAC Bank
Best Commercial Bank Of The Year China
Industrial and Commercial Bank of China (ICBC)
Best Commercial Bank Of The Year India
IndusInd Bank
Best Commercial Bank Of The Year Indonesia
Bank Rakyat Indonesia (BRI)
Best Commercial Bank Of The Year Japan
Mizuho Bank
Best Commercial Bank Of The Year Kyrgyz Republic
Kyrgyz Investment and Credit Bank
Best Commercial Bank Of The Year South Korea
Woori Bank
Best Commercial Bank Of The Year Singapore
DBS Bank
Best Commercial Bank Of The Year Sri Lanka
Commercial Bank of Ceylon PLC
Best Commercial Bank Of The Year Taiwan
E.SUN Commercial Bank
Best Commercial Bank Of The Year Thailand
Kiatnakin Bank
Best Commercial Bank Of The Year Vietnam
Asia Commercial Bank (ACB)
Best Private Bank Of The Year China
China CITIC Bank
Best Private Bank Of The Year Singapore
DBS Bank
Best Innovation In Retail Banking Bangladesh
Eastern Bank (EBL)
Best Innovation In Retail Banking China
Industrial and Commercial Bank of China (ICBC)
Best Innovation In Retail Banking India
IndusInd Bank
Best Innovation In Retail Banking Indonesia
Bank Central Asia (BCA)
Best Innovation In Retail Banking Japan
SBI Sumishin Net Bank
Best Innovation In Retail Banking Kyrgyz Republic
Kyrgyz Investment and Credit Bank
Best Innovation In Retail Banking Malaysia
Hong Leong Bank
Best Innovation In Retail Banking Pakistan
HBL
Best Innovation In Retail Banking Philippines
Union Bank of the Philippines
Best Innovation In Retail Banking Singapore
OCBC Bank
Best Innovation In Retail Banking South Korea
Woori Bank
Best Innovation In Retail Banking Vietnam
Asia Commercial Bank (ACB)
Best Islamic Bank Of The Year Bangladesh
Al-Arafah Islami Bank
Best Islamic Bank Of The Year Indonesia
BRISyariah
Best Islamic Bank Of The Year Malaysia
Bank Islam Malaysia Berhad
>>>AUSTRALASIA AWARD WINNERS
BANKING CEO OF THE YEAR
Australasia
Mr. David McLean
Westpac (New Zealand)
**********
BEST CUSTOMER SERVICE
PROVIDER OF THE YEAR
Australasia
TSB Bank (New Zealand)
**********
Best Investment Bank Of The Year Australia
Macquarie Group
Best Commercial Bank Of The Year Australia
Commonwealth Bank
Best Commercial Bank Of The Year New Zealand
Australia and New Zealand Banking Group
Best Private Bank Of The Year Australia
Westpac Private Bank
Best Innovation In Retail Banking Australia
Heritage Bank
Best Innovation In Retail Banking New Zealand
TSB Bank