China

Analysts weigh that an RRR cut is still needed considering liquidity conditions.

Lenders also sharply increased provisions for future bad debt.

This represents the first quarterly decline in three years.

Shanghai- and Shenzhen-listed banks are likely to see 6.7% increase in profit.

Almost 30 banks have unveiled plans to set up WM units following clearer policies.

The energy sector saw the most defaults of $6.94b.

During the 13th National People's Congress (NPC), Chinese Premier Li Keqiang presented the government work report. Whilst the market read the new growth target (6-6.5%) rather negatively, Premier Li Keqiang was very transparent about the difficulties in reaching this target and the fiscal and monetary expansion which will be needed to achieve them. Whilst a lot has been written about tax cuts as well as lowering the still high reserve requirement ratio (RRR), less has been commented on how banks will be affected by the measures announced during the NPC. Li Keqiang made a number of specific announcements on this front. a) lower funding costs for small-and-micro enterprises (SMEs); b) 30% growth in state-owned commercial banks’ lending to SMEs from negative growth in 2018; and c) extending the maturity of loans, especially for manufacturing firms.

Banks have been allowed to issue perpetual bonds to improve solvency ratios.

Loans to SMEs by SOCBs dropped to -4% in 2018 from 12% the previous year.

Shadow banking assets fell to around 68% of GDP in 2018.

Outstanding loans to rural areas already hit $4.91t in 2018.

It is the 12th foreign lender to secure a license after the country loosened up the industry to global players. The Industrial and Commercial Bank of China (ICBC) commenced its operations in the Philippines two months after it secured its license from the Bangko Sentral ng Pilipinas (BSP), reports BusinessWorld. Located in Taguig, Metro Manila, the branch started its operation after registering with the Securities and Exchange Commission in August and securing a banking license from the central bank in November. Following the law passed in 2014 which loosens up local banking to global players, ICBC is the 12th foreign lender to secure a license from the central bank to start operations in the Philippines. The lender is also the first China bank to set up operations in the country after the Bank of China’s kickoff back in 2002. ICBC’s Manila venture comes amidst warmer trade ties between China and the Philippines after President Rodrigo Duterte’s announcement of a ‘pivot’ towards China during his Beijing visit in 2016.

This is only a third of the $480.75b in loans issued in January.

Two in 5 bankers believe China’s economy will grow by around 6.5-7%.

Short-term loans surged 57.8% in January whilst mid- and long-term loans only rose 5.3%.

JPMorgan Chase is still stuck in application stage despite passing an application in May 2018.