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South China Morning Post (April 2)

2018/ 04/ 03 by jd in Global News

Banks and regulators in China have engaged in a delicate dance between reducing non-performing loans (NPLs) and maintaining profits. “That’s why the NPL ratios of the nation’s key banks all hover at about the same level–now around 1.7 per cent of loans,”  though “Fitch estimates that the real ratio could be as high as 20 per cent, implying total NPLs of 19 trillion yuan (US$3 trillion).” But the regulator is now becoming more demanding in NPL reduction and unforgiving of gimmicks previously employed to hide NPLs. “Given Beijing’s focus on the stability of the financial system, the flow of NPLs into the market should pick up considerably in the next two to three years, providing ample opportunity for new investors.”


The Economist (June 10)

2017/ 06/ 12 by jd in Global News

“As European bank crises go,” the demise of Banco Popular “was an orderly one,” even something of a “triumph…. Spain’s government, the European Commission and Santander all cheered the outcome as a model European response to a bank crisis.”


Euromoney (February Issue)

2017/ 02/ 22 by jd in Global News

“New accounting rules requiring banks to take upfront charges against possible losses through the full life of a loan promise damaging pro-cyclicality.” IFRS 9 comes into effect next January. It “will require banks to recognize expected loan losses even before borrowers miss a single interest or principal repayment.” This major change “will hit both reported earnings and capital even if a borrower manages to remain current on debt servicing.” Uncertainty abounds, but it looks like “US and Japanese banks will be subject to their own variant, current expected credit loss (CECL), under US GAAP.”


Institutional Investor (October 21)

2016/ 10/ 23 by jd in Global News

“Negative interest rates are nothing new in Europe, where some central banks have effectively been charging depositors since 2014. But if rates stay below zero much longer, the region’s banks and institutional investors may have to rethink their portfolios to keep afloat.”


Financial Times (September 23)

2016/ 09/ 24 by jd in Global News

“US banks have achieved a clean sweep of the top five places in global investment banking for the first time in at least six years.” This highlights “the country’s dominance of investment banking since the financial crisis.”


Institutional Investor (July 29)

2016/ 07/ 31 by jd in Global News

U.S. REITs have soared on a “torrid rally.” Though the momentum will slow, strong fundamentals should underpin the sector, which is also benefiting from negative interest overseas. “The economy’s seven-year recovery should sustain real estate demand.” Moreover, “banks’ conservative real estate-lending policies in the wake of massive losses during the financial crisis should continue to limit supply.”


The Economist (July 2)

2016/ 07/ 03 by jd in Global News

“It is now a week since voters narrowly opted for Brexit, and the country has seldom looked so wildly off the rails. The prime minister has handed in his notice. The leader of the opposition is struggling to survive a coup. The pound hit a 31-year low against the dollar and banks lost a third of their value, before stabilising. Meanwhile there is talk in Scotland and Northern Ireland of secession.”


Financial Times (June 30)

2016/ 07/ 01 by jd in Global News

“The UK’s decision to leave the EU will not have any immediate, direct negative consequences for the ratings of states and major banks across Asia Pacific,” according to Fitch Ratings who also warned that “Japan could prove the exception…given the yen’s haven status and resultant strengthening posing a risk to policymakers’ planning.”


Wall Street Journal (June 5)

2016/ 06/ 07 by jd in Global News

For North Korea’s “Kim Jong Un and the Chinese banks that sustain his regime, life is suddenly more complicated.” The U.S. designated “the entire country a ‘primary money-laundering concern.’ This is the biggest gun in the arsenal of financial sanctions. If enforced, it will make banks world-wide choose between doing business with North Korea and maintaining access to U.S. dollars.” Welcoming the more stringent designation, the Wall Street Journal writes, “It’s about time.”


Financial Times (May 25)

2016/ 05/ 27 by jd in Global News

News that the cross-border payment system Swift “has at least woken up to the challenge facing its business” is encouraging. “But this is not just a problem involving cross-border deals. Cyber crime is increasingly a threat to the whole financial industry. This is one digital challenge that banks cannot duck.”


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