Financial Services Update: June 4, 2020

Financial Services Update | June 4, 2020
Authors: Michaela Wong, Hataipat Ploy Sresthabutr
 
THE COUNCIL'S TAKE
 
 

Digital Transformation Accelerated by Southeast Asian Banks in Times of COVID-19

Southeast Asian banks are expected to accelerate their digital transformation strategies due to the coronavirus pandemic and changing consumer behavior resulting from social distancing measures. While digitally advanced banks who can innovate more quickly are likely to flourish, incumbents with inferior digital capabilities would be less competitive. Incumbent banks might struggle to offer the same level of customer services and competitive financial products.

According to a Fitch Ratings report, banks will most likely be more active in pursuing growth through digital channels. In fact, even before the pandemic outbreak, banks in major Southeast Asian markets (with the exception of many Philippine banks) had not broadly been relying on the expansion of physical distribution channels or branch networks to drive revenue. It is estimated that banks in key ASEAN markets have on average been enhancing revenue at an 8% compound annual growth rate (CAGR) from 2014 to 2019 while their branch networks have been shrinking by 1% GAGR.

Several major banks across the region have reported an increase in online banking activities since the onset of COVID-19. Bank Rayat Indonesia (Persero) Tbk reported around 88 percent year-on-year growth in internet banking activity in the first quarter of 2020. Similarly, a rise in digitalization can be observed as consumers turned to online channels for their banking needs in the Philippines.

In addition to the increase of online transactions, online investment sales have increased in Singapore. DBS Bank, OCC Bank, and United Overseas Bank (UOB) reported the rise in digital account opening among their customers who engage in digital investing and the usage robo-advisory services. Similarly, UOB Asset Management (Malaysia) Berhad (UOBAM (Malaysia) announced that it has launched a robo-advisory service to provide online customized investment portfolios earlier in May.

Importantly, the Fitch Ratings report also expects the digital banking trend to continue, even after the pandemic subsides due to the newly-adopted habits of bank customers.

Singapore’s Life Insurance Industry Premiums up for the First Quarter of 2020

In May, the Life Insurance Association, Singapore (LIA Singapore), reported that the life insurance industry observed over 20% growth in sum, with a total of SG$34.6 billion for the first quarter of 2020. According to the Association, the life insurance industry in Singapore recorded a total of SG$965.8 million in weighted new business premiums for the first quarter of 2020, signifying a 10% increase compared to the same period in 2019.

In regard to the industry’s employment scene, employment in Singapore’s life insurance industry increased by 4% year-on-year, with 359 net new hires. As of March 31, 2020, Singapore’s life insurance industry’s workforce accounted for 8,668 employees in total. Additionally, 14,604 representatives held exclusive contracts with companies operating a tied agency force within the same period.

On May 5, 2020, LIA Singapore and the General Insurance Association (GIA Singapore) announced their plans to provide additional support for policyholders during the COVID-19 outbreak, following Prime Minister Lee Hsien Loong’s announcement on April 21, to extend the country’s Circuit Breaker period to June 1. The extended insurance coverage would cover all outpatient telemedicine claims with immediate effect.

Coronavirus Presents Both Gains and Challenges to Southeast Asia’s Fintech Startups

According to Forbes, the COVID-19 pandemic is unlikely to halt the rapid advancement of fintech firms in Southeast Asia, though the outbreak will cause unprecedented challenges for startups. In Indonesia, despite the outbreak of COVID-19, payments services companies have experienced growth from rising transaction volumes and the acquisition of new users. A growing number of fintech platforms in Indonesia, particularly those operating in equity crowdfunding (ECF) and peer-to-peer (P2P) financing segments, have also expanded their participation in Indonesia’s private markets. Across Southeast Asia, winners also include companies focusing on security-based technology, regtech (regulatory technology used for the management of regulatory processes), and electronic payments.

On the contrary, many fintech sub-sectors have been negatively impacted by the coronavirus outbreak. Risk areas include lower productivity and operational efficiency; slower market demand; decline in new users and transactions; behavior changes of business partners, including financial institutions. Recent reports also reveal that the COVID-19 pandemic is causing fintech funding to evaporate. Following the spread of COVID-19, the withering of fintech funding occurred first in China and Southeast Asia before moving on to other areas.

Nevertheless, Southeast Asia still presents various fintech opportunities and several success stories related to fintech in Southeast Asia have been reported. Asset managers see fintech as to growth in Southeast Asia. Singapore-based fintech, Gobear, recently that it has secured $17 million through its latest investment round to expand financial services across Asian markets. Ant Financial Services Group, a company under the umbrella of China’s Alibaba Group Holding has reported its plan to invest $73.5 million in Digital Money Myanmar, aiming to engage with the underbanked communities in Myanmar.

 
ADVOCACY UPDATE
 
 

Digital Economy Taxation proposed in the Philippine House of Representatives

On May 19, Representative Joey Sarte Salceda filed House Bill No. 6765 (copy attached), to be known as Digital Economy Taxation Act if enacted, in the Philippine House of Representatives seeking to establish a fiscal regime for digital services and amending sections 57, 105, 108, and 114 of the National Internal Revenue Code.

The salient features of this bill include the following amendments and clarification:

  1. Definition of terms (section 3) - Digital advertising services, Electronic commerce platform, Network orchestrator, Services rendered electronically, Subscription-based services.
  2. Withholding of Tax at Source (section 57) – The network orchestrator shall withhold tax on taxable income/revenue derived through a membership in a network orchestrator system.
  3. Persons liable (section 105) – Any person who, in the course of trade or business, sells, barters, exchanges, leases goods or properties, including those digital or electronic in nature, renders services including those rendered electronically, and any person who imports shall be subject to the value-added tax (VAT)…(emphasis supplied).
  4. Section 108. The phrase "sale or exchange of services" means the performance of all kinds of services in the Philippines for others for a fee, remuneration or consideration, whether rendered electronically or otherwiseincluding the supply by any resident or non-resident person of digital advertising services such as online advertisement services, provision of ad space, any other facility or service for online advertisement; the supply by any resident or non-resident person of subscription-based services; the supply of services that can be delivered through an information infrastructure, such as the internet.
  5. The value-added tax withheld under the new section shall be remitted within ten (10 days) following the end of the month when withholding was made.
  6. The standard VAT, currently set at 12%, will be applied to digital services as defined (SEC 6).
  7. The bill requires that those who render digital services must do so through a resident agent or a representative office in the Philippines (SEC 8).
  8. A non-resident person shall have the privilege of doing business in the Philippines as a network orchestrator and/or as an electronic commerce platform exclusively through a representative office or an agent which shall be a resident corporation in the Philippines. Revenues derived from the aforesaid services shall, for tax purposes, be revenues generated by the representative office or agent (SEC 9).
  9. This Act shall take effect immediately upon its publication in the Official Gazette or in at least two (2) newspapers of general circulation in the Philippines (SEC 13).

If unchallenged in the House of Representatives, this bill will be heard and deliberated on in the Senate as part of the bicameral legislative process in the Philippines. There is political pressure to look for additional sources of government revenue as part of the COVID-19 Philippine economic recovery.

The deadline for member input has passed and the Council is in the process of collating members input for submission before Congress breaks for recess on June 5. Contact Kim Yaeger, Lilibeth Almonte-Arbez and Michaela Wong with any questions.


US-ABC Advocacy Tracker Now Available
In response to member feedback and in our effort to improve members' ability to plug into our many ongoing advocacy efforts, we have launched a simple Advocacy Tracker on the Council website. The Advocacy Tracker lists all active Call for Inputs with due dates and contacts for which Council staff to reach out to for more information. The tracker can be found on our website under the Members Only section. You may reach out to Kim Yaeger at kyaeger@usasean.org if you have any questions or feedback regarding the Advocacy Tracker.

 
IN THIS UPDATE
 
 

Market Development
China tests digital currency and policy recommendations for Việt Nam
Yoma Strategic's mobile payments joint venture in Myanmar ties up with Alipay operator
Malaysia's Telecommunications Firm Packet One Networks to Help the Financially Underserved after Acquiring Digital Banking License
Fintech arm of WEG Bank forms blockchain in banking partnership with Singapore's Anquan Capital
DBS Bank joins blockchain trade-finance network Contour
HLB fast tracks credit approval for SMEs to support them in COVID-19 times
Card payment introduced for settling traffic fines
TONIK Chooses V-Key as the Mobile Security Partner for its Digital Bank in the Philippines
Onepay introduces mobile interbank service app in Myanmar
GoBear has acquired AsiaKredit to drive growth through digital consumer lending
Avaloq Inks First Deal in the Philippines
SC to facilitate capital market product distribution via e-service platforms

Asset Management
Vietnam Is Asia’s Best Stock Market Performer in May
Sirius Ventures leads seed funding in SG fintech firm ShuttleOne
Value of restructured loans in state banks reaches $15 billion
SSI increases charter capital to $259.3 million with bonus share issue
Thailand's Digio raises US$4M in Series B funding round from Beacon VC, others
CXA Group raises funds from Humanica, HSBC
Visa backs Singapore fintech startup Nium in new funding round
Singapore Fintech Lender Raises Funds for Thailand Venture
VFCA wants to cut trading during massive sell-off sessions
Central bank mulls ban on purchase of convertible bonds
Vietnam finance ministry waives 50% of 20 securities fees

Banking
Malaysia's "Big 3" banks face growing pressure from Covid-19
Microfinance institutions in Myanmar face COVID-19 cash flow crisis
Banks urged to promote digitalisation
Credit harder to come by as Philippine banks turn wary on loans
Banks may face distress if Covid persists – Diokno –
Total assets of banks in Việt Nam stand at $522 billion
Sun Life launches digitally enabled selling process for clients
Vietnam further cuts policy rates to mitigate coronavirus impact
Indonesia’s financial system at risk amid pandemic: KSSK
COVID-19: OCBC first-quarter profit slumps to 7-year low, builds loan-loss defences
Singapore bank OCBC's profit slides as it builds loan-loss defences
Ambank, Maxis offer solutions to help SMEs Tap into e-commerce
UOB extends $4b in loans to mid-sized firms under scheme
MoF: Banks agree to waive additional charges on HP loans
Bank Negara cuts OPR rate to lowest in 10 years
Maybank, CIMB reduce lending rates by 50bps
Yoma Bank sets the pace as Myanmar's banking sector opens up

E-Payments
UnionPay pushes hard for cashless payments
Vietnamese take increasingly to cashless payments
Vietnam cashless spending up 39 percent
E-commerce targets to grow 25 per cent per year, more than half of population to shop online by 2025
Mobile money: moving closer to official deployment
Vietnam forms group for digital currency policy research
Boost introduces Boost Payment Link to help SMEs, microbusinesses go cashless
Vietnam operators poised for mobile money move
Mobile payments to grow 400 pct in five years
Visa: Over 70% of Malaysians supportive of cashless payment
Mobile money pilot project submitted to PM for approval
How Philippines learned to love digital money thanks to Covid-19
Vietnamese e-wallets attractive to investors

Insurance
AM Best Revises Outlooks to Negative for Bangkok Insurance Public Company Limited
Prudential offers Singapore fintechs S$20,000 cover against accidental death, injury to employees
Beazley expands Singapore cyber & technology capabilities
Indonesia's Bank Rakyat Receives Bids for Life Insurance Unit
Digi, AXA Affin launch prepaid internet plan with life insurance coverage
Myanmar permits reinsurance, new categories for general insurance  
Insurance policyholders can now claim for Covid-19 screening for emergency surgeries
Indonesia holding company to support state-owned insurers: AM Best - Reinsurance News
AIA waives premium, extends coverage for Covid-19
Insurers record revenue increase during COVID-19
Singapore insurers expand coverage for COVID-19 patients

Market Regulation
Malaysia doubles online trading limit as small investors rush in
Bank of Thailand ready to curb recent baht strength
Thai Parliament approves $84b package to lift virus-hit economy
Singapore Government Pledges Support for E-Payments Adoption
FIST law to boost investors’ confidence in PHL
SE Asia Stocks-Most markets end higher; Thailand gains most on interest rate cut
Indonesia surprises by holding key rate amid volatile market
Cambodia Launches DLT Payments Network, CBDC Imminent
Monetary Authority of Singapore, Singapore Fintech Association & AMTD, Introduce Grant Program to Support Fintechs
Bank Indonesia Reveals Six Monetary Policies to Keep Financial System Stable
MEDAC to simplify loan procedures for entrepreneurs
Securities Commission to Allow for E-Wallets to Sell Capital Market Products; TNG eWallet Welcomes the Move
Government to help pay interest on mortgages, car loans
BSP adopts relief measures in support of MSME sector

 
ARTICLE CLIPS
 
 
Market Development

China tests digital currency and policy recommendations for Việt Nam vietnamnews.vn 26th May 2020
China officially started testing its sovereign digital currency, the so-called Digital Currency Electronic Payment (DCEP), at the beginning of this month, putting pressure on Việt Nam to research cryptocurrency in the context of international integration. Commenting on the move, Báo Đấu Thầu (Bidding) online newspaper quoted Nguyễn Trí Hiếu, a banking and financial expert, as saying that digital currencies were a global trend due to the increasing demand for transactions and payments. For Việt Nam, the move has not had an impact as the State Bank of Việt Nam (SBV) is yet to allow digital currencies to be used in the country.

Yoma Strategic's mobile payments joint venture in Myanmar ties up with Alipay operator The Straits Times 18th May 2020
Alipay operator Ant Financial Services Group will invest US$73.5 million (S$104.9 million) in Digital Money Myanmar (Wave Money) - a mobile payments joint venture (JV) between Telenor Group and the Yoma group - as part of a strategic partnership to promote financial inclusion in Myanmar. This will be for unbanked and underbanked communities in the country, mainboard-listed Yoma Strategic announced on May 18 in a regulatory filing. The partnership will allow Wave Money to leverage Ant Group's experience in building mobile payment platforms to enhance its digital competence, capabilities, user experience and service offerings. Ant Group's investment will come by way of a new share issuance subject to certain conditions, including regulatory approval. The move will allow Ant Group to become a substantial minority stakeholder, alongside existing shareholders. As at Nov 8, 2019, Telenor holds 51 per cent interest, Yoma Strategic holds 34 per cent interest, First Myanmar Investment Public Company holds 10 per cent interest, and Yoma Bank holds 5 per cent interest in Wave Money. Yoma Strategic will acquire the 10 per cent held by First Myanmar Investment Public Company, raising its stake to 44 per cent. The stake acquisition will be completed before Ant Group's investment in Wave Money.

Malaysia's Telecommunications Firm Packet One Networks to Help the Financially Underserved after Acquiring Digital Banking License Crowdfund Insider 18th May 2020
C.C. Puan, the CEO at Packet One Networks (P1), a major wireless broadband provider focused on becoming an established mobile telecom by making access to the Internet a great experience for Malaysian residents, is planning to acquire a digital banking license. He added that he’d like to make Malaysia the “gold standard” for financial inclusion in the ASEAN region. Green Packet recently announced a joint venture with Chinese Internet giant Tencent Holdings, which will serve as its domestic business partner for an artificial intelligence (AI)-enhanced digital KYC platform. Tencent owns WeBank, one of China’s leading digital banks that has dominated the country’s virtual banking services in terms of overall set quality, profitability and return on equity. WeBank has also been successful at integrating the latest banking technologies. The company’s chatbot client takes care of around 98% of customer inquiries. WeBank’s digital KYC facial recognition software has handled more than 640 million ID verification requests, to date. Green Packet has been licensed by the nation’s reserve bank, the Bank Negara Malaysia, to develop white-label digital wallet software for local businesses. The tech firm’s services are reportedly being used by major local companies such as Petronas’ Setel, a fuel electronic payment solution that’s accessible from over 700 Petronas gas stations located throughout the country.

Fintech arm of WEG Bank forms blockchain in banking partnership with Singapore's Anquan Capital Finextra Research 18th May 2020
Anquan Capital Pte. Ltd, a Singapore-based group of technology companies has partnered with the FinTech arm of the German WEG Bank AG, which operates under the brand name TEN31. Anquan Capital has launched a number of innovative technology companies including Zilliqa, Anqlave and Aqilliz. TEN31 Bank, which is currently developing into a specialist institute for blockchain-related FinTech companies, will implement joint projects with these companies in the future. The new partners will announce specific projects over time. However, it is expected, for example, that the legal framework for crypto storage that has been in place since early 2020 will play a role. TEN31 has positioned itself accordingly at an early stage and secured permission under the grandfathering rule of the German banking code. This collaboration will explore opportunities between Anquan Capital through Anqlave and Zilliqa. Anqlave develops custody and secure data storage solutions for enterprises, while Zilliqa is a high-throughput, high-performance blockchain for next-generation enterprises and applications. With the new partnership, the strategy of TEN31 Bank continues to consistently focus on strategic partnerships. With this important step, the vision of the founder, Matthias von Hauff, to shape the bank into a full-service provider for FinTech customers has become a reality. Like all TEN31 partners, Anquan attaches great importance to transparency and compliance. The partnership between the two groups now makes it possible in particular to develop services in the financial sector that require a solid regulatory framework.

DBS Bank joins blockchain trade-finance network Contour The Straits Times 11th May 2020
DBS Bank has joined Contour's network, which is built on blockchain technology company R3's Corda and digitalizes global trade processes such as the creation, exchange, approval and issuance of letters of credit (LCs). It is the first Singapore bank to do so, ahead of the blockchain-based platform's full launch later this year, DBS announced on May 11. Other banks in the network include BNP Paribas, Bangkok Bank, ING, HSBC, Standard Chartered and Citi Ventures, according to the website for Singapore-based Contour. DBS will be able to tap Contour's digital solutions to provide a fully digital end-to-end LC settlement process for its customers, including the transfer of electronic trade and title documents. This will help to shorten the settlement time, reduce paperwork and simplify complex trade processes. Corporate customers will also be able to conduct digital pre-issuance negotiations between applicant and beneficiary in real-time, and share this with the bank post-endorsement for LC issuance. This increases the accuracy of LCs issued and, in the event of discrepancies, facilitates quicker resolution, DBS said. In addition, there will be real-time tracking of transactions on the platform along with a full audit trail, resulting in greater transparency.

HLB fast tracks credit approval for SMEs to support them in COVID-19 times IBS Intelligence 11th May 2020
Hong Leong Bank (HLB) has enhanced and simplified the application and approval process for SME loans so that they can fast track the Bank Negara Malaysia (BNM) Special Relief Facility (SRF). This will ensure that small and medium-sized enterprises (SMEs) receive the necessary financial relief in a timely manner. Terrence Teoh, Head of SME Banking at HLB said providing flexibility on the application process has made a significant difference in easing the burden and anxiety of customers. He said, “We made it simpler and seamless for the customers, where they are able to apply via email and complete the process through digital consent acceptance. This not only played closely to our digital at the core strategy, but just as importantly, allowed us to help clients at a critical time during the Movement Control Order (“MCO”), where physical restrictions inhibit the traditional way of doing things.” As of April 30, 2020, HLB had approved approximately RM 1.3 billion of facilities under the BNM SRF for over 1,600 SMEs spanning across sectors ranging from wholesale and retail trade, manufacturing, construction to transport, storage and communication. Domenic Fuda, Group Managing Director and Chief Executive Officer of HLB, said, “SMEs which makes up of 98.5%* of all business establishments in Malaysia have been hit badly during the MCO. As a bank with a strong entrepreneurship heritage, we understand that cash flow is their biggest challenge, and they presently face financial pressures to keep their businesses afloat and protect the livelihood of their owners and employees. We have been engaging with our customers throughout the MCO period to help where we can, including extending credit where appropriate and payment deferment where necessary to assist with their short-term cash flow management. We are also helping SMEs digitizing their banking so as they are able to operate under restricted movement and hence quickly bounce back as soon as the situation improves.” HLB is also extending assistance to individuals and SME customers in the industry-wide loan deferment program which was introduced on April 1, 2020, for a period of 6 months.
Card payment introduced for settling traffic fines Borneo Bulletin Online 10th May 2020
The Royal Brunei Police Force (RBPF) through the Traffic Control and Investigation Department has introduced the credit and debit card payment service to settle fines for traffic offenses. This was an effort to provide different platforms to carry out transactions. The new payment service allows the public who did not bring enough cash to make payment for traffic offenses using debit or credit card.

TONIK Chooses V-Key as the Mobile Security Partner for its Digital Bank in the Philippines Yahoo Finance 6th May 2020
V-Key announced today that it has been chosen to be the mobile security partner of TONIK digital bank, to provide a secure mobile retail banking platform for its new customers in Philippines. TONIK being a digital-only "neobank" relies on the mobile app as the main contact point for its customers. The ability to provide a trusted and secure environment for its customers to perform their banking transactions is critical to the customer experience for its services. Built on V-Key’s patented Virtual Secure Element technology, V-OS App Protection provides an added layer of tamper protection and security enhancements. V-OS secures sensitive processing and data, ensuring app integrity when deployed, and safeguarding user privacy even if the device is lost or compromised. It checks for malware, prevents Main-in-the-Middle (MITM) attacks, combats tampering, and even provides a secure, anti-fraud keyboard for data input. The V-OS App Protection that TONIK chose to deploy resides on V-Key’s Cloud Platform, also known as V-OS Cloud. Powered by the Microsoft Azure Cloud Platform, V-OS Cloud offers the same powerful App Protection functions as on-premise servers. It provides agile deployment of the solution thus shortening time to market and simplifying customer support.

Onepay introduces mobile interbank service app in Myanmar The Myanmar Times 6th May 2020
The service was launched in the midst of COVID-19 with the goal of reducing social contact and mass gatherings as well as to increase convenience. U Aung Zeya Myo, deputy managing director of Onepay, said the intention is for users to gain a simple, secure and convenient way of transferring cash. “Working with our official banking partner AGD to support interbank services in our app is one of the attempts to reach that goal,” he said.  He added that the interbank service does not have any hidden costs or extra charges. Any costs associated with remittance will be set by each respective bank. “The app is designed to notify the users of the transfer rate and cost before they confirm the transaction.  Settlement will take up to two working days after the transaction has been made,” he said.  “As the official banking partner, AGD will manage the interbank transactions of Onepay users.” U Pyi Soe Htin, Chief Business Officer of AGD Bank said. Users are able to transfer money between banks by adding funds to their Onepay wallets. This can be done through an AGD bank account, or with any e-commerce enabled MPU, Visa or Mastercard. Funds can also be added by using cash-in services through Onepay appointed agents throughout the country. 

GoBear has acquired AsiaKredit to drive growth through digital consumer lending Business Insider 5th May 2020
Financial marketplace GoBear has acquired digital consumer lender AsiaKredit for an undisclosed sum, according to Tech in Asia. GoBear provides users with access to a range of products, including insurance, banking, and loans, through its financial supermarket via a network of over 100 partners. The financial marketplace has served over 40 million customers in the seven Southeast Asian (SEA) markets in which it operates. AsiaKredit provides end-to-end digital products to consumers in the Philippines, with over 1 million loan applications processed to date. The acquisition makes sense for GoBear because it will allow the fintech to expand into two entirely new business lines. GoBear's financial marketplace is a particularly pertinent solution for the underserved target market, as it provides streamlined access to financial products for the large segment of the population that's financially excluded. What's more, in the Philippines, only 15% of adults have a credit card, illustrating the credit gap that GoBear could help to fill by tapping into AsiaKredit's customer base and cross-selling credit cards.

Avaloq Inks First Deal in the Philippines finews.asia 5th May 2020
The banking software maker has announced that it will provide its software-as-a-service solution to the Bank of the Philippine Islands (BPI), one of the country’s biggest banks in terms of capitalization. Avaloq will help BPI improve customer experience and boost the efficiency of five of its business units and subsidiaries, ranging from private banking to asset management and investment banking, with its cloud banking software, the Zurich-headquartered firm announced in a statement on May 5. Founded in 1851, BPI is the first bank in Southeast Asia and the Philippines’ fourth-largest banking group by assets, with PHP2.21 trillion ($43.4 billion) in total assets for FY2019, up 5.7 percent year-on-year. It is currently on the second phase of a multi-year digital transformation program, and experiencing strong demand for its digital channels. "We have ambitious plans in growing our presence in the Philippines and want to make ourselves present and relevant to the needs of domestic onshore banks in the market," Pascal Foehn, Avaloq Executive Board Sponsor for Asia and Avaloq Group COO, told finews.asia. While BPI is the first client that Avaloq has in the Philippines, the firm has had a presence in Asia for over a decade, and has been rapidly expanding over the past 18 months, with a number of new or expanded deals in other Asian markets, including Maybank Premier in Singapore, and Indonesia's largest banking group Mandiri. Avaloq also has contracts with DBS Bank and Kasikorn Bank, as well as Agricultural Bank of China, China Industrial Bank and CITIC Bank International. The firm also recently launched Avaloq.one, a B2B marketplace for fintechs to integrate their solutions directly on Avaloq’s platform through standard open APIs.
SC to facilitate capital market product distribution via e-service platforms The Edge Markets 5th May 2020
The Securities Commission Malaysia (SC) says it will facilitate online distribution of capital market products, such as unit trusts, through e-services platforms like e-wallet or e-payment service providers. This follows the amendment to the SC’s Guidelines on Recognized Markets which now include a new chapter on e-service platforms. The chapter details the registration requirements and ongoing obligations for e-service providers. “This amendment will allow operators of e-wallet or e-payment applications to partner with Capital Markets Services License holders to distribute capital market products to investors,” the SC said in a statement on May 5. The commission said e-wallet or e-payment operators, which are currently subject to the oversight of another sectorial regulator, will be required to obtain that regulator’s approval before submitting their application to the SC. SC chairman Datuk Syed Zaid Albar said the commission will continue to facilitate the development of innovative digital solutions to improve access to investments for all participants of Malaysia's capital market. During a virtual press conference held on April 16, the SC said there had been an increase in the number of online trading accounts being registered. At the same time, it said there had also been a shift among license holders towards using digital channels to distribute capital market products and services. “Interested operators will have to register with the SC as recognized market operators and may submit their applications from today onwards,” it added.

Asset Management

Vietnam Is Asia’s Best Stock Market Performer in May Yahoo Finance 27th May 2020
Vietnam has managed to repeat its success of containing a virus outbreak, helping make the nation’s stock market Asia’s top performer this month. The benchmark equity index has rallied 13% in May, driven mainly by local investors as foreign funds pulled money from risk assets. Vietnam’s currency has rebounded more than 1% after sliding to a record low in March during the global selloff. “We are invested and continue to look for good stock specific stories,” said Joshua Crabb, a money manager at Robeco in Hong Kong, as Vietnam offers a promising medium-term outlook.

Sirius Ventures leads seed funding in SG fintech firm ShuttleOne DealStreetAsia 20th May 2020
Venture capital firm Sirius Venture Capital has led a $500,000 seed funding in ShuttleOne, a Singapore-based fintech firm that is developing a blockchain platform for financial services. The funding round was joined by German investor Andromeda GmbH and private investors from Singapore, Indonesia, and Europe, according to a statement. ShuttleOne CEO Lim Hong Zhuang said the fresh funding will be used to expand the company’s operations in Malaysia and Indonesia and to launch its services in Thailand and the Philippines. The funding will also help improve ShuttleOne’s security modules on the blockchain and improve its corporate governance, he added. The startup provides remittances services to individuals and provides loans to MSMEs, particularly e-commerce merchants, through its proprietary Smart Contracts blockchain protocols and digital tokens. Working with intermediaries such as remittance agents, ShuttleOne claims it helps informal workers remit money more “transparently, instantaneously, and at a lower transfer fee” of 3 per cent, compared with 7 per cent via the traditional remittance route. Since its launch in 2019, ShuttleOne said it has garnered more than 600,000 users in Southeast Asian countries. The company recently became eligible for a grant from the Monetary Authority of Singapore to support firms in adopting, customizing, or collaborating on digitalisation projects to streamline processes and deepen capabilities. The investment comes as the World Bank estimates global remittances reached $689 billion in 2018, up 9 per cent from 2017 and roughly doubled from 2006. Remittances to South Asia grew 12 per cent in 2018, compared with 6 per cent in 2017. East Asia and the Pacific region saw 7 per cent growth in 2018, up 2 percentage points from 2017. Sirius Venture is a Singapore-based food tech and logistics-focused venture capital firm. Wong said Sirius’ portfolio of food tech startups will also explore using ShuttleOne’s financial solutions moving forward. In April, Sirius co-anchored a $3-million funding round in Hargol FoodTech, an Israel-based startup that produces alternative protein from grasshoppers.

Value of restructured loans in state banks reaches $15 billion The Jakarta Post 18th May 2020
State-owned banks have restructured loans worth up to Rp 223.16 trillion (US$15 billion) to over 1.7 million borrowers as part of the loan-relaxation program introduced by the Financial Services Authority (OJK) in March, this year. State-Owned Lenders Association (Himbara) chairman Sunarso said in a webinar hosted by Bisnis Indonesia on May 15 that micro, small and medium enterprises (MSMEs) were the biggest beneficiaries of the restructuring program. The number of MSME borrowers that were eligible for the loan restructuring amounted to 1.5 million, 91 percent of the total. The value of the loans restructured in the MSME segment amounted to Rp 137 trillion, around 61 percent of the total restructured loans, as of April 30. Meanwhile, the consumer segment made up around 12 percent of the restructured loans and the wholesale segment accounted for the remaining 27 percent. “Our focus is to save the MSMEs’ credit assets,” Sunarso said, adding that on average, the borrowers from the MSMEs segment, especially micro-enterprises, could only survive for around three months amid the COVID-19 pandemic. Sunarso, who is also Bank Rakyat Indonesia (BRI) president director, noted that as of April 30, BRI had restructured almost half of the total loans restructured by Himbara, or around Rp 101.23 trillion, to over 1.4 million borrowers. The MSMEs segment accounted for 94 percent of BRI’s restructured loans. The OJK issued OJK Regulation No. 11/2020 in March asking banks to relax debt quality assessments and restructuring requirements for loans of up to Rp 10 billion as part of the relief program for borrowers impacted by COVID-19. The regulation stipulates that the debt or financing could be restructured by lowering interest rates, extending repayment periods, reducing principal and interest arrears, adding debt or financing facilities or converting debt or financing into temporary equity participation, with the scheme chosen to be decided between the banks and their clients.

SSI increases charter capital to $259.3 million with bonus share issue vietnamnews.vn 18th May 2020
SSI Securities Corporation has increased its charter capital to over VNĐ6.029 trillion (US$259.3 million), 1,001 times the capital it had at the time of establishment. The country’s largest securities company issued nearly 83 million shares with a face value of VNĐ10,000 as it paid dividends to shareholders at the rate of 16 per cent. As of March 31 it had assets of more than VNĐ27 trillion ($1.16 billion).

Thailand's Digio raises US$4M in Series B funding round from Beacon VC, others e27 14th May 2020
Digio, a Thailand-based payment technology provider, has raised US$4 million in Series B round from Beacon Venture Capital, Thai interbank payments provider PCC, and Private Equity Trust for SME Growing Together 2 with Siam Alpha Equity (SAE) as Trust Advisor, to accelerate product and services development. Digio said that the funding will enable it to expand capacity to provide innovative payment technology for financial institutions and strengthen Thailand’s digital payment infrastructure. With the global health crisis today, the infrastructure supporting cashless payment plays a pivotal role in enabling remote transactions, both on and offline for consumers and businesses. Nopphorn Danchainam, Founder and CEO of Digio, said that Digio’s products allow major institutions to enable digital payments for consumers and SMEs. Digio was established in 2012 to provide provides turnkey payment solutions, including credit/debit card processing and e-wallets for financial institutions. Based in Bangkok, Digio is considered the pioneer in mobile POS platforms in the country, enabling small merchants across Thailand to accept card payments — particularly by enabling transactions, payments, and signatures to be processed through smartphones. The system supports Thailand’s national e-payment policy, which aims to transform the country into a cashless society. The company, which was recently awarded the Payment Facilitating Services (PFS) license by the Bank of Thailand (BOT) in 2020, will help it offer new payment services directly to consumers and small businesses. In collaboration with PCC, Digio recently launched FLite, a low-cost POS terminal that will allow SMEs to securely accept and process contactless credit card payments. The company has also worked with major Thai financial institutions to facilitate e-invoices and e-payments, culminating in the release of their latest product, MeeBill, which allows online and offline retail merchants to issue invoices to customers and collect QR payments via their mobile devices, as well as automatically reconciling the invoice against cash received.

CXA Group raises funds from Humanica, HSBC TechInAsia 14th May 2020
Singapore insurtech startup CXA Group announced on May 13 that it has raised an undisclosed amount of funding from Thai HR solutions provider Humanica and HSBC Life International Limited, an indirect, wholly owned subsidiary of HSBC Holdings. The amount raised was undisclosed, but the company said Humanica has doubled its investment, following its convertible note bridge financing last year.In addition, CXA has also signed a Memorandum of Understanding with Humanica to integrate the latter’s human capital management platform with CXA’s in Thailand. The collaboration will see a combined digital HR payroll and employee benefits for Humanica’s 3,000 local enterprise customers and 700,000 employees. The two companies will offer corporate wellness and disease management initiatives as part of the partnership. With the latest investment, CXA said it will further customize its platform from a software engineering perspective so it can be white-labeled and used by banks in Asia. Through this customization, employees can have access to a range of health, wealth, and wellness offerings based on their personal data via a mobile app. Employees can then purchase offerings by drawing down existing insurance policies provided by their employers and using funds released into the platform’s ewallet. The latest collaboration agreements are part of CXA’s business strategy expansion, according to a statement. Last year, the company teamed up with ThoughtWorks to re-architect its microservices-based platform and set up a technology hub in Vietnam for software engineering. Founded in 2013, CXA offers employees personalized health and lifestyle products. It says it currently serves more than 600 enterprises and over 700,000 employees in 20 countries. It also claims to have achieved a 50% revenue growth last year. The company previously raised a total of US$58 million over several funding rounds with Openspace Ventures, B Capital Group, and Singapore-based global fund EDBI, among others.

Visa backs Singapore fintech startup Nium in new funding round TechInAsia 14th May 2020
Singapore-based fintech platform Nium today announced that it has raised an undisclosed amount of funding from new investors Visa and BRI Ventures, the corporate venture arm of Indonesia’s Bank BRI. Some existing investors also participated in the round. The company will use the new capital to further develop its payment infrastructure, which includes outreach to consumers, businesses, banks, and other financial institutions, according to a statement. A significant portion of the new funds will also go towards product development and tuck-in acquisitions in markets such as Europe, India, the UK, and the US. The startup has raised more than US$59 million to date over several funding rounds, according to its website. Its other investors include Vertex Ventures, Vertex Growth, Fullerton Financial Holdings, Rocket Internet, Global Founders Capital, SBI Japan, and MDI Ventures, among others. Nium started in 2015 as Instarem. It offers cross-border payments and money transfer services for both consumers and businesses. For its remittance-as-a-service capabilities, the company said it currently serves millions of customers across 10 places including Australia, Canada, Europe, Hong Kong, India, Indonesia, Japan, Malaysia, Singapore, and the US. Its enterprise solutions, which include payroll disbursement and expense management, among others, are present in six continents, the startup said. It currently operates its Send, Spend, and Receive business in over 90 countries.

Singapore Fintech Lender Raises Funds for Thailand Venture finews.asia 12th May 2020
The peer-to-peer lending platform brings on board two new and highly reputed investors, who join Dutch public-private development bank FMO, Vertex Ventures Southeast Asia and India, Openspace Ventures, Thailand’s AddVentures (Siam Cement Group) and Vietnam’s VinaCapital Ventures in the latest funding round. Validus has announced that it has secured $20 million in funding in its ongoing series B+ funding round, co-led by Vertex Growth Fund (Vertex Growth) and Kuok Group's Orion Fund managed by K3 Venture Partners, it announced in a statement on Tuesday. The funds will be used to invest in technology and innovation, solidify its position in the markets where it operates, and fund an upcoming venture in Thailand slated for Q4 2020, the statement said. Founded in 2015, Validus brings together accredited individual and institutional lenders and SMEs. In November, the startup expanded into Vietnam, its third market after Singapore and Indonesia, and has facilitated 15,000 loans totaling more than $315 million – a record for P2P lending platforms in Singapore.

VFCA wants to cut trading during massive sell-off sessions vietnamnews.vn 12th May 2020
The Việt Nam Financial Consulting Association (VFCA) has recently asked for securities transactions to be suspended during massive sell-off sessions to stabilise the market. The VFCA sent a letter to the Prime Minister and the Ministry of Finance on May 6 asking for a mechanism that reduces or disconnects securities transactions during these sessions. Due to the impacts of COVID-19, global stock markets have experienced a number of sell-off sessions, leading many to fall sharply.

Central bank mulls ban on purchase of convertible bonds VnExpress International 8th May 2020
In the near past, some banks have been buying up convertible bonds from businesses in order to restructure their debt. This carries many risks if the businesses continue to run into difficulties and are unable to repay both principal and interest, leading to the issuance of more bonds to restructure debt, the State Bank of Vietnam (SBV) said in a statement on May 7. As such, the SBV has published for gathering feedback a draft regulation that will not allow banks to purchase corporate bonds issued for the purpose of restructuring their debt, or bonds issued with one of its purposes being the restructuring of debt. In addition, the draft proposes that banks should be banned from purchasing corporate bonds if their internal bad debt ratio exceeds 3 percent, unless the bond issue is part of a debt restructuring scheme approved by competent authorities. Banks will also not be allowed to purchase bonds from enterprises that had bad debt issues in the past 12 months, whether they are buying it from the issuing enterprise or from another investor. This would prevent banks with high bad debt ratios from worsening the quality of credit further, the SBV said. Lastly, banks will not be able to acquire corporate bonds issued for the purpose of raising capital to buy shares in other business. According to the SBV, this practice has been observed in recent times, making it difficult for lending institutions to control or monitor what borrowers do with their capital.

Vietnam finance ministry waives 50% of 20 securities fees hanoitimes.vn 8th May 2020
The decision, which is set to take effect from May 7 to December 31, is among the MoF’s measures to support enterprises and individuals affected by the Covid-19 pandemic. Fees subject to 50% reduction include registration fees for the issuance of certificates for brokerage firms, fund management firms; license fees for operation of securities depository and member funds, among others, for which the reduced amount would be in range from VND1-50 million (US$43 – 2,144) depending on the type of the certificate.

Banking

Malaysia's "Big 3" banks face growing pressure from Covid-19 New Straits Times 29th May 2020
Malaysia's three largest banks by assets face growing pressure on profitability from the coronavirus-led downturn, Moody's Investors Service said. This was because their asset quality was likely to deteriorate from 2021 as loan repayment moratoriums expire. The three banks are Malayan Banking Bhd (Maybank), which is rated A3 stable by Moody's, CIMB Group Holding Bhd (Baa1 stable) and Public Bank Bhd (A3 stable).
Microfinance institutions in Myanmar face COVID-19 cash flow crisis The Myanmar Times 26th May 2020
Travel restrictions and government orders to defer repayments and lend at lower interest rates have reduced the ability of microfinance institutions (MFIs) in Myanmar to operate at a time when there is a pressing need for capital from the rural population due to COVID-19. The inability to collect repayments from some borrowers has led to road bumps in liquidity and cash flows for MFIs, and this, in turn, has limited the lenders' capacity to extend financing to others. Since Myanmar enacted the Microfinance Law in 2011, lending by MFIs has become the biggest source of financing for the rural economy. There are almost 200 licensed MFIs, serving an estimated 5.5 million clients in Myanmar.

Banks urged to promote digitalisation vietnamnews.vn 23rd May 2020
The COVID-19 pandemic has caused a serious effect to the economy, but it has helped accelerate the race for banks to go digital. With many people looking for new options to deal with their financial affairs, digitalisation of services and e-payments are becoming crucial. Statistics showed the country now has 70 credit institutions and intermediaries unit such as E-wallets providing payment services online and through cell phone apps. The total value of digital financial transactions topped VNĐ7.3 quadrillion and 300,000 transactions via mobilephone so far.

Credit harder to come by as Philippine banks turn wary on loans The Business Times 20th May 2020
Banks in the Philippines will become more selective on their lending, despite central bank efforts to cushion the economic blow from a banking slowdown, a recent report has predicted. Maybank Kim Eng analysts warned that lenders are turning cautious on the back of expectations of a decline in asset quality, even though both banks and the economy are in a stronger position than during the Asian financial crisis in 1997. To be sure, the Bangko Sentral ng Pilipinas plans to stimulate lending, such as by counting loans to small businesses towards reserve requirements, even as the Philippine government committed 51 billion pesos in wage subsidies for these smaller employers. But corporate debt levels across various sectors “have been increasing the past few years which indicates shrinking room for more borrowing”, the Maybank Kim Eng analysts added. Loan growth is expected to come in at between 2 per cent and 3 per cent in 2020, before a rebound to 10 per cent in 2021, in tandem with the wider economic outlook.

Banks may face distress if Covid persists – Diokno – The Manila Times 19th May 2020
Some banks in the Philippines may suffer “distress” if the coronavirus disease 2019 (Covid-19) pandemic and its negative economic impact continue to linger, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno warned on May 18. “Although Philippine banks are adequately capitalized, have quality assets and have ample buffers, some may face financial distress if the pandemic and its aftermath — slower domestic and global economy and more risk-averse consumers — last indefinitely,” Diokno told The Manila Times in a text message. His warning comes after various institutions forecast a global economic recession this year, and a sharp contraction was projected for the Philippine economy because of the pandemic. It also comes after Fitch Ratings trimmed last week the credit rating of the Philippine National Bank and the credit outlook of China Banking Corp., Land Bank of the the Philippines and Development Bank of the Philippines, saying the weaker Philippine economy would weigh on their operations. Unless a Covid-19 vaccine is found, and widely distributed and applied to contain the public health crisis, the BSP chief said, “things won’t be back to where they were before.” Besides banks, Diokno said it was reasonable to assume that some companies might also face financial difficulties, given the severity of the coronavirus and uncertainty it caused. “For example, it is clear that firms in the airlines industry and tourism-related industry would face extreme financial distress, because air travel and tourism might take some time before they reach their pre-pandemic level of activity,” he explained. In a bid to contain the spread of the coronavirus, the government have imposed travel bans since March. Despite all these, the Bangko Sentral chief said no bank had informed the central bank of any financial difficulty so far as a result of the pandemic’s impact on their businesses. His assurance was consistent with the BSP’s earlier report that stressed the preparedness of the Philippine financial system — with the banking system at its core — to withstand unforeseen shocks like Covid-19. “On the whole, banks maintained liquidity buffers above prudential norms, which, in turn, enabled them to absorb potential shocks to operations, such as the impact of [the] Covid-19 pandemic,” it said.

Total assets of banks in Việt Nam stand at $522 billion vietnamnews.vn 18th May 2020
Total assets of credit institutions and foreign banks in Việt Nam by the end of the first quarter of this year inched down 0.72 per cent to VNĐ12.48 quadrillion (US$521.76 billion) compared with the end of last year. The latest report released last week by the State Bank of Việt Nam (SBV) showed assets of four large State-owned banks, including Agribank, Vietcombank, VietinBank and BIDV, accounted for 41.76 per cent of the total assets.

Sun Life launches digitally enabled selling process for clients SunStar CEBU 14th May 2020
SUN Life of Canada (Philippines) Inc. has launched a new digitally enabled selling process that will allow Filipinos to avail themselves of life insurance products and stay financially protected even amid the enhanced community quarantine (ECQ). The digitally enabled process will make use of teleconferencing tools so clients may still connect with Sun Life financial advisers to get professional advice on their financial goals, learn about the insurance solutions that would best fit their needs and avail themselves of these products. Sun Life Philippines president Alex Narciso said: “This is our way of helping Filipinos stay protected from financial risks, especially in these times of uncertainty. Whether they aim to get a life insurance policy or upgrade their existing coverage, they can do so without leaving the comfort and safety of their homes. The process we implemented is designed to make the experience as convenient, easy and secure as possible for our clients.” To avail themselves of Sun Life’s products remotely, clients only need to have an internet connection, a valid email address, any online video conferencing tool, landline or mobile phone, one valid government-issued photo and signature-bearing identification card and access to online banking or e-wallet services. Over-the-counter deposits through select partner banks will also be accepted as an alternative payment method. Sun Life employs digital safety and data protection measures to protect client data in this digitally enabled process. The digitally enabled selling process will be in effect during the ECQ period as initiatives utilizing information and communications technology and other technology via remote communication have been permitted by the Insurance Commission.

Vietnam further cuts policy rates to mitigate coronavirus impact VnExpress International 13th May 2020
Vietnam cut its policy rates for a second time in two months on Wednesday as it seeks to boost growth amid the coronavirus pandemic. The State Bank of Vietnam reduced the refinancing rate from 5 percent to 4.5 percent and the discount rate cut from 3.5 percent to 3 percent. The dong deposit rate cap for terms of one to six months has been reduced from 4.75 percent to 4.25 percent. It is part of the government’s efforts to "help businesses overcome difficulties and ensure social security amid the Covid-19 pandemic," the central bank said.

Indonesia’s financial system at risk amid pandemic: KSSK The Jakarta Post 11th May 2020
The COVID-19 pandemic is threatening the stability of Indonesia’s financial system, as it causes a supply-demand shock and weakens the country’s financial industry and macroeconomy, according to the Financial System Stability Committee (KSSK). Finance Minister Sri Mulyani Indrawati, who serves as the committee’s chair, said on May 11 that the supply-demand shock and lower gross domestic product (GDP) outlook posed a “serious threat” to financial system stability. The KSSK was on alert over risks caused by the pandemic. Indonesia's gross domestic product (GDP) grew 2.97 percent year-on-year (yoy) in this year’s first three months,the lowest level seen since 2001. The economy has almost come to a halt following physical distancing measures implemented by businesses and consumers to contain the coronavirus spread. The KSSK expects the economy to grow at 2.3 percent this year, a marked slowdown from 5.02 percent in 2019. During the first quarter, the country’s financial markets were badly hit as foreign investors sold a net of around Rp 145 trillion (US$9.72 billion) worth of Indonesian assets as they flocked into safe havens. The capital outflow was towering compared to Rp 69.9 trillion recorded during the 2008 global financial crisis and Rp 36 trillion during the taper tantrum period in 2013, the KSSK revealed. The situation saw the rupiah fall to its lowest level in history at Rp 16,575 per US dollar on March 23, down 15.8 percent from February, according to the committee data. The currency has since recovered a bit, gaining 10.21 percent as of April 30 compared to late March, as the government issued $4.3 billion worth of global bonds in early April. The OJK revealed on Monday that loan growth in the banking industry amounted to 7.95 percent yoy in the first quarter, higher than the 6.08 percent recorded at the end of last year. However, no new loan demand was recorded in the period, as the growth came from the disbursement of existing credit facilities, OJK chairman Wimboh Santoso said. The nonperforming loan (NPL) ratio increased to 2.77 percent during the period versus 2.53 percent in December.

COVID-19: OCBC first-quarter profit slumps to 7-year low, builds loan-loss defences CNA 8th May 2020
Singapore's second-largest lender Oversea-Chinese Banking Corp (OCBC) more than doubled its loan loss provisions due to the coronavirus and warned of a "very uncertain" economic outlook, as it posted a 43 per cent plunge in first-quarter net profit on May 8. The worse-than-expected performance pushed OCBC's profit to the lowest in seven years, as it joined larger Singapore peer DBS Group and global banks in building defences against credit losses amid the pandemic. The bank's net profit fell to S$698 million (US$494 million) in January to March from S$1.23 billion a year earlier - well below an average estimate of S$941 million from four analysts, according to Refinitiv data. OCBC's provisions for credit losses swelled to S$657 million from S$249 million a year earlier, as it built up a buffer for "stresses expected against the recessionary market outlook" and factored in allowances for a Singapore oil trader. Singapore's trade-reliant economy is set to record the worst recession in its history, as economic and consumer activity slumps due to government restrictions on travel. Kevin Kwek, a senior analyst at research firm Sanford C Bernstein in Singapore said OCBC earnings were always more volatile versus other local lenders especially in times of market volatility - because of its insurance subsidiary. Profit contribution from OCBC's insurance unit plunged 94 per cent to S$18 million in the latest quarter from a year earlier, OCBC said. Last year, Singapore banks had forecast muted earnings growth for 2020 as interest rates soften and lending moderates following a strong performance in the past few years.

Singapore bank OCBC's profit slides as it builds loan-loss defences Reuters 8th May 2020
Southeast Asia’s second-largest lender Oversea-Chinese Banking Corp (OCBC) on May 8 flagged a weak outlook after doubling loan-loss provisions for the economic fallout from the coronavirus and posted a 43% slump in first-quarter net profit. The worse than expected performance was the Singapore bank’s lowest quarterly profit in seven years as it joined larger rival DBS Group and global banks in building defenses against credit losses as a result of the pandemic. “Even if there is a stabilization by the end of this year, a strong recovery is unlikely until 2021,” CEO Samuel Tsien said in a media call. He said OCBC was buiding allowances for both impaired and non-impaired assets to factor in the weak near-term economic outlook. OCBC’s net profit fell to S$698 million ($494 million) in the three months to March 31, from S$1.23 billion a year earlier and well below an average estimate of S$941 million from four analysts, according to Refinitiv data. Singapore’s trade-reliant economy is expected to suffer the worst recession in its history as economic and consumer activity slumps in the face of government restrictions on travel. Last year Singapore banks had forecast muted earnings growth for 2020 on softening interest rates and more moderate lending after strong performance over the past few years. OCBC said provisions for credit losses swelled to S$657 million from S$249 million a year earlier, building a buffer for “stresses expected against the recessionary market outlook”. It also cited allowances for a Singapore oil trader without disclosing the name of the company. The oil and gas sector accounted for 5% of OCBC’s S$271 billion loan book. Kevin Kwek, a senior analyst at research firm Sanford C. Bernstein in Singapore, said OCBC’s earnings are always more volatile than those of other local lenders - particularly in times of market volatility - because of its insurance subsidiary. Profit contribution from OCBC’s insurance business plunged 94% to S$18 million from a year earlier, OCBC said.

UOB extends $4b in loans to mid-sized firms under scheme The Straits Times 6th May 2020
United Overseas Bank (UOB) has approved $4 billion in loans to mid-sized firms under the Temporary Bridging Loan Programme, it said on May 5. The loans are going to clients in sectors that have been hit hard by the Covid-19 pandemic, including construction, retail and hospitality. Banks here have provided help to small and medium-sized enterprises (SMEs) in various ways, including deferment of some interest payments. They have also tapped a Monetary Authority of Singapore facility for Enterprise Singapore loans that lends at an interest rate of 0.1 per cent. The Government is taking a 90 per cent risk share on loan schemes overseen by Enterprise Singapore, such as the Temporary Bridging Loan Programme and the SME Working Capital Loan, for applications initiated between April 8 this year and March 31 next year. UOB noted that the $4 billion of loans were extended to mid-sized firms from April 8 to April 30. The application process has been digitalized so customers can get the funds in about a week. Meanwhile, OCBC Bank said the volume of applications from mid-sized firms for relief measures has surged by more than 10 times over the past two months. DBS Bank's group head of SME banking, Ms Joyce Tee, said it is focusing on support for micro and small enterprises, which typically have fewer working capital financing options. It has made government-assisted loans available to around 3,000 corporate customers, of which about 65 per cent are micro and small enterprises.

MoF: Banks agree to waive additional charges on HP loans The Edge Markets 6th May 2020
Banks have now agreed to waive the additional interest or profit charges imposed on installments for hire-purchase loans for the six-month moratorium announced by the government. Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said his ministry has reached an agreement with the banking industry on this matter, following the government’s call to the industry to waive the additional charges. He said borrowers are therefore required to resume paying their installments as usual, based on the terms of agreements with their respective banks including with an extension of six months in the repayment period, if they chose to take up the moratorium. The minister’s announcement today is expected to put a stop to the heated debates that started over the weekend, on whether banks should impose additional charges for the six-month period from April 1 to Sept 30. Some quarters, including the Malaysian Trades Union Congress, accused Bank Negara Malaysia and commercial banks of being inhumane and placing more focus on profit than helping the rakyat. They pointed out that the moratorium was introduced because some borrowers are facing a hard time paying their loans during the Movement Control Order. Zafrul subsequently suggested that the financial institutions waive any accrued interest or profit imposed with respect to the moratorium period. On May 3, Agrobank, a development bank under the purview of the Minister of Finance Inc, announced it would do exactly that for all eligible individual and small- and medium enterprise customers, during the six-month period.

Bank Negara cuts OPR rate to lowest in 10 years Free Malaysia Today 5th May 2020
Bank Negara Malaysia (BNM) has slashed the overnight policy rate (OPR) by 50 basis points to 2%, its lowest level since 2010. In a statement, the central bank said the ceiling and floor rates of the OPR corridor have been correspondingly reduced to 2.25% and 1.75% respectively. Earlier on May 5, Bloomberg reported that the OPR rates were set to be reduced from 2.5% based on a survey of economists. BNM said Covid-19 and measures to contain its spread had affected global and local economic conditions and disrupted economic activities. “The movement control order (MCO), while necessary to contain the spread of the virus, has also constrained production capacity and spending. Labour market conditions are also expected to weaken considerably. Economic conditions will be particularly challenging in the first half of the year.” It said Putrajaya’s fiscal stimulus measures would offer some support to the economy while the easing of MCO restrictions should allow the slow improvement of economic activity. But, it said, the outlook for growth remained highly uncertain due to developments surrounding Covid-19, while inflationary pressures are expected to remain muted.

Maybank, CIMB reduce lending rates by 50bps NST Online 5th May 2020
Malayan Bank Bhd (Maybank) and CIMB Group Holdings Bhd have become the first banks to immediately announce a reduction in their lending rates following Bank Negara Malaysia's move to cut its Overnight Policy Rate (OPR) on May 5. Both banks said in separate statements that they would reduce their base rate (BR) and base lending rate (BLR) by 50 basis points (bps). Maybank and CIMB said the move was in line with the reduction in the OPR by 50bps to 2.00 per cent. Maybank said effective from May 8, its BR would be lowered from 2.50 per cent per annum to 2.00 per cent per annum, while its BLR from 6.15 per cent to 5.65 per cent. Similarly, the banks's Islamic BR and Base Financing Rate (BFR) would be reduced from 2.50 per cent to 2.00 per annum and from 6.15 per cent to 5.65 per cent respectively. Maybank Islamic's fixed deposit rates will also be adjusted downwards by 50bps. The last revision in Maybank's BR was on March 5 when it was revised to 2.50 per cent from 2.75 per cent. Meanwhile, CIMB Bank Bhd and CIMB Islamic Bank Bhd will effect a corresponding 50bps reduction in their BR and fixed deposit/fixed return income account-i board rates. CIMB said all financing facilities based on BLR and BFR would be reduced by 0.50 per cent to "help achieve the corresponding effect of monetary policy transmission intent by Bank Negara's Monetary Policy Committee." All rate changes would take effect on May 13, said the bank.

Yoma Bank sets the pace as Myanmar's banking sector opens up Nikkei Asian Review 5th May 2020
Myanmar's Yoma Bank, a mainstay lender in the Southeast Asian country, is setting the pace in attracting foreign investment after authorities lifted a ban on foreign financial institutions holding shares in local banks. In April, the bank announced that it will receive about 131 billion kyat ($94 million) from Greenwood Capital, an affiliate of GIC, and Norfund -- the Norwegian Investment Fund for Developing Countries. The two funds became the second and third foreign shareholders in Yoma after World Bank Group member International Finance Corporation, which switched its convertible loan into equity in May 2019. Dean Cleland, Yoma Bank CEO, said in a statement that the infusion will "accelerate our investment into new technology, new partnerships and new ways of banking our target segments." Yoma is one of the country's top 5 local banks with approximately 3 trillion kyat in assets. It is part of First Myanmar Investment, a core component of the Yoma Group conglomerate established in the 1990s by Serge Pun, a prominent local tycoon. In January 2019, Myanmar's central bank announced that foreign financial institutions would be allowed to hold up to a 35% share in local banks. Later in November the threshold was raised on a "case-by-case basis." Yoma Bank became the first to take advantage of the deregulation. The central bank in April approved a 35% investment into Ayeyarwaddy Farmers Development Bank by Thailand's Kasikornbank. First Myanmar Investment, which listed on Yangon Stock Exchange in 2016, has seen revenue surge, lifted by its fast-growing financial unit. Revenue from the financial services business, which includes Yoma Bank, stood at 254.6 billion kyat for the year ended March 2019, up 170% over the past three years.

E-Payments

UnionPay pushes hard for cashless payments Khmer Times 29th May 2020
UnionPay pushes hard for cashless payments UnionPay International, a wholly owned subsidiary of China UnionPay, said the cashless payment method is the only wise and safe when it comes to paying at the supermarket to mitigate the possibility of exposure to the COVID-19. The Chinese financial services corporation said so far its UnionPay cards are widely accepted at major supermarket chains in Cambodia including; AEON MaxValu, Lucky Supermarket, Bayon Supermarket, and Thai Huot Market. It said local customers can now opt for several cashless payments available to support their daily payment needs, while assisting in reducing the need for physical transactions such as handling bank notes, and face-to-face contact. The National Bank of Cambodia has also recently encouraging the use of electronic methods for settlements rather than using cash to ward off COVID-19.

Vietnamese take increasingly to cashless payments vietnamnews.vn 28th May 2020
Non-cash payments have increased sharply, especially through mobile devices and the internet, according to the State Bank of Vietnam. Speaking at a press briefing in HCM City on Tuesday to announce a series of events for Cashless Day 2020 (June 16), Phạm Tiến Dũng, director of the central bank’s payment department, said the use of cash as a ratio of payments has gradually fallen over the years. Last year online payments went up by 64 per cent in terms of number of transactions and 37 per cent in terms of value, while mobile payments surged by 198 per cent and 210 per cent.

Vietnam cashless spending up 39 percent VnExpress International 25th May 2020
Spending via Visa credit and debit cards last year surged 39 percent year-on-year as Vietnamese consumers became less dependent on cash. The data, compiled for a year until December 1, 2019, also showed the number of transactions rising 54 percent during this period, according to a recent release from payment company Visa. A Visa survey also showed that 37 percent of Vietnamese respondents were using contactless payment technology that allows users to simply tap their card on the terminal to make a payment.

E-commerce targets to grow 25 per cent per year, more than half of population to shop online by 2025 vietnamnews.vn 20th May 2020
Việt Nam has set a target that the e-commerce industry would grow by 25 per cent per year to reach US$35 billion with more than half of the population shopping online by the end of 2025. The goals were highlighted in the master plan for national e-commerce development in 2021-25, which got the Government’s approval late last week.

Mobile money: moving closer to official deployment Vietnam Investment Review - VIR 18th May 2020
After years of delay, mobile money – a technology that allows people to receive, store, and spend money using a mobile phone – is highly likely to be pressed into service from the middle of this year in Vietnam, entailing the opportunities to promote non-cash payment among the more than 50 per cent Vietnamese population who are unbanked.

Vietnam forms group for digital currency policy research CoinGeek 17th May 2020
Vietnam’s Ministry of Finance has formed a research group in charge of exploring and formulating policies to manage digital currencies and virtual assets. According to the ministry, the research group will include nine members led by Pham Hong Son, the vice chairman of the State Securities Commission. The other members will be representatives from the country’s securities regulator, the General Department of Taxation, the National Institute for Vietnam Finance, Vietnam Customs, and the State Bank of Vietnam’s Department of Banking and Financial Institutions.
Boost introduces Boost Payment Link to help SMEs, microbusinesses go cashless The Edge Markets 15th May 2020
Home-grown lifestyle e-wallet Boost has introduced the Boost Payment Link, a low-cost and accessible contactless solution for merchants to help micro-and small-cash-based businesses remain operating. In a statement on May 15, it said many micro- and small-business owners who run cash-based businesses face the risk of shuttering due to a sudden drastic drop in customers, as well as customers choosing to go cashless and limiting the use of banknotes as they seek cleaner and safer ways to transact. Chief executive officer (CEO) Mohd Khairil Abdullah said contactless is now the new normal as the pandemic and movement restriction had changed the way businesses and consumers engage with each other. “The ‘Boost Payment Link’ easily enables micro- and small- cash-based merchants to go cashless and protect their businesses with almost no investment required. All they need is a smartphone, a Boost account, and data or Wi-Fi connection. This is our way to help businesses build resilience and adapt with simple digital solutions and continue operating remotely in a contactless manner that is also safer, cleaner and a more efficient way to do business amid the pandemic,” he said. The company said the Boost Payment Link allows merchants to easily send their customers a payment link via any messaging app such as an email, SMS or WhatsApp, and receive payments conveniently anytime, anywhere. Customers can seamlessly make payments through the link without physically scanning a QR code. Merchants are also able to eliminate the need to invest in a point-of-sale (POS) or payment terminal, which can be costly or have a static QR code to accept payments, it explained. Boost said the new feature also allows traditional cash-based businesses to receive orders and payments online upfront before delivering their goods or services.

Vietnam operators poised for mobile money move Mobile World Live 14th May 2020
Vietnam’s authorities made the final preparations for a full-scale trial of mobile money services, with operators Viettel, Vietnam Posts and Telecommunications Group (VNPT) and MobiFone ready to apply for long-awaited licences, VietnamNet reported. Proposals are awaiting the rubber-stamp from the country’s prime minister after the governor of the State Bank of Vietnam, Le Minh Hung, submitted the central bank’s final proposal on 9 May.

Mobile payments to grow 400 pct in five years VnExpress International 13th May 2020
Mobile transactions in Vietnam are expected to surge 400 percent by 2025 with fintech and banking sectors actively expanding such services. A report jointly released by global market research company International Data Corporation (IDC) and Dutch fintech provider company Backbase also said that as the economy gradually recovers from the challenges of 2020, Vietnam will witness digital transformation in the commercial banking segment.
Visa: Over 70% of Malaysians supportive of cashless payment The Edge Markets 12th May 2020
More than seven in 10 Malaysians are supportive of the country becoming a cashless society and 62% believe it can be achieved within the next five years, according to a study by Visa Inc. The top three benefits cited by consumers in opting for a cashless society are that it will ease the tracking financial records, remove the hassle of having to queue at banks, and enable the country to become more efficient, Visa said in a statement. The study also showed that 69% of Malaysian respondents are planning to use cashless payment methods more often, and move away from cash. This trend is more apparent among the affluent segment, where 77% indicated interest to do so. Visa said the top reasons for the potential increase in digital payment usage are convenience and wider acceptance of digital payments in the country. On top of that, nearly two in five respondents stated that they were carrying less cash compared to two years ago. About 69% of respondents cited this was due to more merchants adopting cashless payments, and 65% indicated it was due to safety concerns when carrying cash. Contactless card payments are also gaining momentum in the country, Visa country manager for Malaysia Ng Kong Boon said in the statement. He said Malaysia is one of the fastest-growing countries in Asia-Pacific in terms of contactless penetration. Based on the study, 65% of Malaysian respondents have used contactless payments, and 85% of them make contactless payments at least once a week. Meanwhile, 82% of respondents have also been using contactless payments more frequently compared to two years ago, said Visa.

Mobile money pilot project submitted to PM for approval vietnamnews.vn 12th May 2020
A mobile money pilot project has been submitted to the Prime Minister for approval, marking a bold step for the development of payments using telecommunication accounts in Việt Nam, Governor of the State Bank of Việt Nam Lê Minh Hưng said at the dialogue between the PM and the business community on Saturday.

How Philippines learned to love digital money thanks to Covid-19 South China Morning Post 10th May 2020
In the past four years in the Philippines, some 50,000 sari-sari stores – small shops selling sundries and operating out of people’s homes – have been transformed into digital payment hubs through partnerships with the payment aggregator companies Posible, a local firm, and True Money, based in Thailand. Using point-of-sale devices distributed by the aggregators, the sari-sari stores are able to process financial services like bill payments, e-wallet top-ups and local remittances. While the services offered by sari-sari stores may not seem particularly hi-tech to people in countries like China or Japan, where online transactions have become the norm, it is only in the past few years they have taken off in the cash-loving Philippines, where seven in 10 adults are unbanked. Now, with lockdown measures to be extended until May 15 in most regions of Luzon island, some observers believe the pandemic will become a turning point in Filipinos’ relationship with digital financial products. In 2018, electronic payments accounted for just 10 per cent of transactions processed by financial institutions in the country, according to the Philippines’ Central Bank, and that figure was just a seven point increase from five years earlier. But since the coronavirus outbreak, people’s behavior has been changing. Over the past month, despite a “slight dip” in the number of sari-sari stores operating due to the virus, POSIBLE reported double-digit growth in the volume of transactions, according to its CEO JG Puzon. The country’s leading e-wallet service, GCash, which is backed by China’s largest fintech firm, Ant Financial, has noticed a similar uptick. Since the quarantine period began on April 4, the e-wallet had enjoyed “double-digit” growth in new user sign-ups across all age groups, said Pebbles Sy, its Chief Technology and Operations Officer.

Vietnamese e-wallets attractive to investors VietnamPlus 5th May 2020
Vietnamese e-wallets have lured hefty sums from diverse partners over the past time, turning the segment into an investment hotspot. Since late 2019, vast money flows have made its way to Vietnam, mainly into e-wallets via merger and acquisition deals. According to the Vietnam Investment Review, Vietnamese online gaming giant VNG Corporation has reduced its stake in wholly-owned e-wallet ZaloPay to 60 percent by issuing shares to other investors. VNG has earned more than 464 billion VND (20.17 million USD) from the deal. ZaloPay had later on scaled up its charter capital to 900 billion VND (39.13 million USD). Last December, China’s Ant Financial, the fintech affiliate of e-commerce giant Alibaba, has quietly acquired a sizeable stake in Vietnamese e-wallet eMonkey of small Vietnamese fintech firm M-Pay Trade. Although the deal value has not been disclosed, it was reported that after the deal, the foreign partner would have significant influence and provide technical expertise to the e-wallet. Earlier, VNPAY, a leading Vietnamese digital payments firm, closed a deal with Japan-based SoftBank Vision Fund and Singapore-based sovereign fund GIC. Accordingly, SoftBank and GIC poured nearly 300 million USD into VNPay, turning this fintech firm into a market leader who currently provides e-payment services to more than 40 banks, five telecom firms, and more than 20,000 local firms. Another major deal last year involved VinID JSC which is 80 percent owned by Vingroup –the leading private conglomerate in Vietnam – which had completed procedures to acquire e-wallet MonPay. The deal value has not been disclosed. Last year's line-up of deals continues, including the merger of e-wallets Vimo and mPOS (both under the management of tech startup NextTech Group), or e-wallet Momo receiving a very large, undisclosed investment from US equity firm Warburg Pincus, just to name a few. Economic experts forecast that the Vietnamese e-wallet market would be a mainstay on investors’ radar this year due to the government’s strong commitment to spurring non-cash payments and e-wallets’ continuous tempting promotion programmes which help draw in users by the droves. According to the freshly-released report titled “FinTech in ASEAN: From Start-up to Scale-up” by United Overseas Bank (UOB), PwC, and the Singapore FinTech Association (SFA), investment in Vietnamese fintech accounts for 36 percent of total investment flowing into this field in the whole ASEAN region in 2019, attesting to the charm of Vietnamese fintech firms in the eyes of foreign investors.

Insurance

AM Best Revises Outlooks to Negative for Bangkok Insurance Public Company Limited Business Wire 29th May 2020
AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Bangkok Insurance Public Company Limited (BKI) (Thailand). These Credit Ratings (ratings) reflect BKI’s balance sheet strength, which AM Best categorises as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM). The negative outlooks reflect the expectation of an increasingly challenging operating environment for BKI over the near-to-medium term, caused by the prevailing COVID-19 pandemic. AM Best expects this environment to drive heightened pressure and potential volatility on BKI’s operating performance and balance sheet strength fundamentals.

Prudential offers Singapore fintechs S$20,000 cover against accidental death, injury to employees The Business Times 20th May 2020
The full-time Singaporean employees of close to 150 fintech firms in Singapore can now get insurance coverage against accidental death and injury for free up till early April next year, under a collaboration between insurer Prudential Singapore and the Asean Financial Innovation Network (AFIN). The staff of Singapore fintech firms that are signed up on AFIN’s online marketplace and sandbox API Exchange (APIX) can receive complimentary coverage of up to S$20,000 against accidental death and injury under Prudential’s PRUAffinity Personal Accident Plan. This is so long as they are Singapore residents between the ages of 18 and 64. This coverage will last through to April 7, 2021. To add, the coverage sum increases to S$50,000 if employees are retrenched, with the increased coverage lasting for six months or until the employee finds a new job, whichever is earlier. If served quarantine orders between April 6 and June 30, these fintech employees will also receive a one-time S$500 cash benefit. Those hospitalised for Covid-19 over the same period will also get a S$200 daily hospitalisation allowance. As part of the package, these employees will be entitled as well to a one-time payout of SS$500 if hospitalized for dengue fever. APIX facilitates innovation and cooperation between fintechs and financial institutions. The non-profit entity was set up in 2018 jointly by the Monetary Authority of Singapore, the World Bank Group’s International Finance Corporation and the Asean Bankers Association. There are currently 231 fintechs on the platform, of which 146 are Singapore firms. More fintech firms can also sign up to APIX. There are more than a thousand fintech firms based in Singapore, data from the Monetary Authority of Singapore showed.

Beazley expands Singapore cyber & technology capabilities Insurance Business Asia 20th May 2020
Beazley has appointed Teck Siong Ng as its first dedicated Singapore-based cyber & technology underwriter, reflecting its increased focus on risks across the Asia-Pacific region. According to a statement from the specialist insurer, Ng joined Beazley in 2015 as a specialty lines underwriter, covering a range of risks including professional indemnity, directors & officers liability, healthcare, commercial crime and cyber. He also managed business development across Beazley’s specialty lines in the region. Prior to joining Beazley, Ng spent 10 years in underwriting roles, most recently at Asia Capital Re, where he was business development team leader for Southeast Asia and India within the casualty & financial lines facultative team. Beazley also announced the launch of a new information & security (InfoSec) policy form for cyber clients in Asia-Pacific. According to the company, the policy form has been streamlined and is in line with its thrust towards providing simpler, user-friendly policies. First-party covers, such as cyber extortion, data recovery costs, business interruption and contingent business interruption, are now integrated into the main policy form rather than being added by endorsement, making cover clearer to understand for brokers and clients, it added. The company’s InfoSec insurance also covers policyholders for fees and costs for legal and forensic services, notification services, call centre services, credit monitoring, identity monitoring or other personal fraud or loss prevention solutions, and public relations and crisis management in case of a data breach.

Indonesia's Bank Rakyat Receives Bids for Life Insurance Unit finews.asia 15th May 2020
The insurance arm of the French bank BNP Paribas and Hong Kong insurance group FWD are said to be among the parties that have bid on a significant minority stake in Asuransi BRI Life, the life insurance arm of Indonesia's Bank Raykat, Bloomberg reported on May 14 . BNP Paribas Cardif has reportedly submitted the highest bid, according to people familiar with the matter, the report said. According to the publication, this is at least the third attempt by the bank, Indonesia's oldest lender, to sell a stake in the unit. FWD and BNP Paribas Cardif were already among interested parties when Bank Rakyat tried to sell 40 percent of the unit in 2015. It revived the plan in 2018, hiring Morgan Stanley to advise on the process, though it was put on hold. It revived the plan to sell a $500 million stake this in March this year.
Digi, AXA Affin launch prepaid internet plan with life insurance coverage The Edge Markets 15th May 2020
Digi Telecommunications Sdn Bhd and AXA Affin Life Insurance are teaming up to offer Digi Abadi, Malaysia’s first of its kind prepaid internet plan that comes bundled with free life insurance cover. In a joint statement, the companies said this limited-edition prepaid plan is an effort by both companies to ensure Malaysians continue to stay connected and well protected, especially when health is a key concern for everyone at this time. It said Digi Abadi bundles both connectivity and insurance cover into one single plan and it is exclusively available via Digi Online Store for 100,000 customers, open to all eligible Malaysians aged 30 to 55 years. To subscribe to Digi Abadi, customers would need to purchase the starter kit at RM28, preloaded with a life insurance cover of up to RM40,000 for death, accidental death and funeral expenses, providing them protection at no additional cost. The plan would also offer customers 3GB of fast internet quota with 30 days validity, 10 sen/minute for calls and SMSes to all networks, and a 365-day SIM validity. Every 30 days, this plan would subsequently renew at RM20 where customers could continue to enjoy the life insurance cover and internet quota, as well as, loyalty bonuses of up to RM55,000 life insurance and 6GB internet quota the longer they stay on the plan.   Digi chief marketing officer Loh Keh Jiat said the companies aimed to provide customers with an easy and affordable way to look after their family as Malaysians brave through these unprecedented times.
Myanmar permits reinsurance, new categories for general insurance   The Myanmar Times 14th May 2020
Myanmar has permitted the business of reinsurance and three new categories of general insurance in the country under two new directives - (4/2020) and (6/2020) - issued by the Insurance Business Regulatory Board (IBRB) on May 12. The three new categories are: Industrial All Risk, Construction All Risk/ Erection All Risk, and Bailee’s Liability Insurance. The aim is to widen insurance coverage in the country. “Whether local or foreign, businesses need insurance coverage under these three categories.
Insurance policyholders can now claim for Covid-19 screening for emergency surgeries The Edge Markets 13th May 2020
Policyholders with medical and health insurance are now entitled to be reimbursed up to RM300 if they are required to undergo screening for Covid-19 before an emergency or semi-emergency surgery. The RM300 can be claimed from the RM8 Million COVID-19 Test Fund (CTF) that was established by The Life Insurance Association of Malaysia (LIAM), Persatuan Insurans Am Malaysia (PIAM) and the Malaysian Takaful Association (MTA). In a joint statement, the associations said the reimbursement will apply to emergency and semi-emergency surgeries conducted from March 27, 2020 to June 30, 2020 or earlier, if the fund is fully utilized. The reimbursement follows the associations' decision to broaden the eligibility criteria for the fund to include the requirement for a Covid-19 test before hospital admission for emergency and semi-emergency surgeries. The term emergency refers to a situation where a patient requires immediate and life-saving intervention, whereas the term semi-emergency refers to a high-risk patient whose condition could easily deteriorate or who has symptoms of a condition requiring time-sensitive treatment.

Indonesia holding company to support state-owned insurers: AM Best - Reinsurance News ReinsuranceNe.ws 11th May 2020
AM Best believes that the upcoming establishment of an insurance holding company by Indonesia’s government will lead to greater corporate governance of state-owned insurers. Indonesia’s Ministry of State-Owned Enterprises is in the process of establishing an insurance holding company, to be led by state-owned investment holding company PT Bahana Pembinaan Usaha Indonesia. AM Best considers state-owned enterprises to be an important part of emerging markets, serving as drivers of economic and strategic interests by managing and transferring the risks of infrastructure developments, energy, credit guarantee, health care and agricultural projects, among others. The entity will aim to improve the efficiency of Indonesia’s state-owned insurers and enhance the quality of risk management and supervision, as well as provide financial support to distressed state-owned life insurer PT Asuransi Jiwasrayav (Jiwasraya). Analysts expect the holding company to be a key solution in saving Jiwasraya, given that the funds channeled via the holding entity can help fulfil Jiwasraya’s policyholders’ obligations. However, Jiwasraya is currently excluded from the holding group given the magnitude of its financial issues. And according to AM Best, the risk management approach needs to be able to reflect the unique characteristics of the business segments and risk profiles in order to be effective. The rating agency noted Better transparency and improvements to financial reporting quality do not change the underlying fundamentals of an insurer, but a clearer picture of insurance companies’ operations is likely to emerge over time.

AIA waives premium, extends coverage for Covid-19 Malay Mail 8th May 2020
AIA Bhd is offering premium/contribution waiver, additional 50 per cent death coverage and extend the period for additional insurance and takaful coverage for Covid-19 to its customers at no additional cost. The company said it would waive the premium/contributions for the first three months to new customers who sign-up for A-Life ProtectTerm or participate in A-Life Kasih Famili in May. “On top of that, customers will also receive free additional hospitalisation and death coverage as well as complementary medical advice on Covid-19 until Sept 30 and June 30, respectively,” it said in a statement on May 8. The offer is open to new customers who sign up between May 6 and May 31 or until the first 50,000 policies/certificates are taken up, whichever comes first. AIA said the additional 50 per cent death coverage due to Covid-19, provided until Dec 31, is offered to all new customers who signed up for selected conventional life insurance, takaful and bancassurance plans, including the newly launched A-Enrich Wealth insurance savings plan, between May 6 and May 31 this year. “This means, if an insured/person covered passes away due to Covid-19, an additional 50 per cent of the basic amount covered will be paid to his/her beneficiary, up to a maximum of RM100,000 or RM250,000 per life depending on the plan,” it said. AIA has also extended the free additional insurance coverage for Covid-19 to Sept 30, 2020 from June 30, 2020 in view of the ongoing pandemic. The additional coverage, announced in February, comes with a hospitalization benefit of RM200 per day up to 30 days of hospitalization if the insured/person covered is diagnosed with Covid-19 and kept in quarantine at any of Ministry of Health Malaysia’s designated hospitals. “An additional lump sum of RM10,000 will be paid to his/her beneficiary, if the individual passes away due to the pandemic,” it said.

Insurers record revenue increase during COVID-19 vietnamnews.vn 7th May 2020
Insurance companies enjoyed an increase in sales in the first quarter of this year. In the first quarter which coincided with the COVID-19 pandemic, Bảo Việt Insurance Corporation, a subsidiary of BVH, applied a 20 per cent discount on some health insurance programmes. Life insurance sector is contributed by Bảo Việt Life with VNĐ225 billion in revenue, up 16 per cent year-on-year.

Singapore insurers expand coverage for COVID-19 patients Insurance Business Asia 5th May 2020
The Life Insurance Association, Singapore (LIA Singapore) and General Insurance Association of Singapore (GIA Singapore) have expanded coverage for COVID-19 patients, as more Singaporeans continue to recover from the disease. According to a joint statement by the industry bodies, insurers will continue to cover patients admitted to a community care facility (CCF) or community recovery facility (CRF) for up to 14 days after they are transferred from a hospital. This, the associations said, takes immediate effect and will last until the closure of the last CCF or CRF in Singapore. Benefits are subject to the existing policy terms and conditions of the respective insurers. CCFs and CRFs are facilities, such as the Changi Exhibition Centre and Singapore Armed Forces camps, that have been repurposed to supplement hospitals’ capacity in treating COVID-19 patients. CCFs are for patients that are deemed lower-risk and exhibit mild symptoms, while CRFs house patients that have recovered from acute illnesses and are clinically stable. Outpatient telemedicine claims will also be covered, with immediate effect, the announcement said. However, claims for daily hospital cash benefit by individuals who have violated government travel advisories will not be honored.

Market Regulation
Malaysia doubles online trading limit as small investors rush in The Edge Markets 3rd Jun 2020
Malaysia will double online trading limits this year, as the rush of small investors into stocks helped push the market into the bull territory. The Securities Commission will allow up to 100,000 ringgit (US$23,500) daily online settlement in the second half of the year, from the current limit of 30,000 to 50,000 ringgit, Executive Chairman Syed Zaid Albar said in an emailed response to questions. The benchmark FTSE Bursa Malaysia KLCI Index has risen more than 20% from a low in March, led mainly by glove makers, with trading volume hitting a record 11 billion shares. Individual investors are finding more time to flock into stocks from their homes amid a nationwide lockdown, spurred on by relatively cheap stocks amid low-interest rates.

Bank of Thailand ready to curb recent baht strength Bangkok Post 1st Jun 2020
The Bank of Thailand said it’s concerned about a recent rapid appreciation in the currency and added it’s ready to take steps to curb a climb that could imperil an already fragile economy. The baht’s near 2% rise against the dollar in the past month is among the steepest in Asia, aided by dwindling Thai coronavirus cases, an easing national lockdown and a shallower-than-expected first quarter economic contraction. This backdrop may attract short-term capital flows to the baht, and its performance may be out of line with economic fundamentals, the central bank said in a statement on Monday.

Thai Parliament approves $84b package to lift virus-hit economy The Straits Times 1st Jun 2020
Thailand's Parliament passed a 1.9 trillion baht (S$84 billion) economic support package yesterday to ease the impact of the coronavirus on the country. The legislation, comprising three Bills, includes a government plan to borrow 1 trillion baht and central bank measures worth another 900 billion baht in soft loans and support for corporate bonds. Of the 1 trillion baht of borrowing, 600 billion baht will be for public health works and relief measures, and the rest for rebuilding the economy and job creation.

Singapore Government Pledges Support for E-Payments Adoption finews.asia 26th May 2020
To accelerate digital transformation and boost e-payment adoption, the Singapore Government is allocating more than S$500 million ($352 million) in funding to businesses. To support the use of e-payments in hawker centers, the government is offering up to S$1,500 in bonuses for stallholders to adopt e-payments. It is also offering a «Digital Resilience Bonus» of up to S$5,000 to companies that adopt Paynow Corporate and e-invoicing, as well as business process or e-commerce solutions. An additional S$5,000 is available to those that adopt advanced solutions, according to details released by the Ministry of Finance.
FIST law to boost investors’ confidence in PHL BusinessMirror 22nd May 2020
THE pending law on the strategic transfer of soured assets from banks to other asset management companies will eventually protect the country’s viability to become a bright investment destination in the post-coronavirus disease (Covid-19) world, the Bangko Sentral ng Pilipinas (BSP) chief said on Thursday. Talking to reporters via an online conference, BSP Governor Benjamin Diokno expressed support for the program—currently dubbed the Financial Institutions Strategic Transfer (FIST) law—and said it will enable the local financial system to mobilize savings and investments for the country’s recovery post-pandemic. Due to the global health crisis and the economic disruption it has caused, banks are bracing for the surge of nonperforming loans (NPLs), or more popularly known as “bad” or “soured” loans. These are loans that remain unpaid for more than 90 days after their due date.

SE Asia Stocks-Most markets end higher; Thailand gains most on interest rate cut Reuters 20th May 2020
Most Southeast Asian stock markets rose on Wednesday, with Thailand leading the pack, after the country's central bank cut its benchmark interest rate to a record low to cushion the economy from the coronavirus impact. Other markets in the region also clocked gains on locally driven news, even as broader Asian stocks and currencies lacked direction after scepticism over Moderna Inc's COVID-19 trial vaccine dented hopes of a quicker rebound from the crisis. The Thai benchmark rose 0.9% to its highest closing level since March 6, as the central bank cut its benchmark interest rate for the third time this year to help the region's second-largest economy, which slipped into a recession in the first quarter.

Indonesia surprises by holding key rate amid volatile market The Edge Markets 19th May 2020
Indonesia’s central bank unexpectedly left its key interest rate unchanged for a second month to bolster the currency in the face of a flagging economy and volatile financial markets. Bank Indonesia held its seven-day reverse repurchase rate steady at 4.5%, following rate cuts in February and March. Only six of 25 economists expected the bank to stay put today, with the rest predicting a 25 basis-point cut. “This decision considers the need to maintain exchange rate stability amid the uncertainty of global financial markets, although Bank Indonesia sees room for lower interest rates as inflationary pressure is low and there is a need to encourage economic growth,” Governor Perry Warjiyo said in an online briefing. The Covid-19 pandemic is taking a heavy toll on trade and consumer spending in Southeast Asia’s biggest economy, with the government slashing its growth projection for this year to 2.3% from an initial 5.3%. The government has taken unprecedented emergency fiscal measures, abandoning a budget deficit ceiling of 3% of gross domestic product (GDP) as it accelerates spending to counter the pandemic. It now projects this year’s budget deficit at more than 6% of GDP. “Given the weak first-quarter growth — and likely even weaker momentum since then due to broader Covid-19 outbreak and impact — the case for a cut to help growth has clearly risen of late,” said Wellian Wiranto, an economist of Oversea Chinese Banking Corp (OCBC) in Singapore. “Hence, BI’s (Bank Indonesia) reluctance to ease is even more stark.” Bank Indonesia’s extended pause underscores ongoing concerns about currency weakness and financial market stability, especially as the government prepares to borrow and spend more. Warjiyo said today the rupiah remains undervalued and the central bank would intervene in markets to support it. He also reiterated the bank’s commitment to buy government bonds to help finance the budget deficit. The currency has fallen more than 6% against the US dollar since the start of the year, making it one of the worst performers in Asia, although over the past month it has been the best. The rupiah held gains made earlier today and was up 0.5% at 14,770 per US dollar as of 3.39pm in Jakarta.

Cambodia Launches DLT Payments Network, CBDC Imminent Asia Crypto Today 14th May 2020
The South-East Asiancountry of Cambodia is looking to a distributed ledger technology (DLT) network to reinvent their country’s payments and rid themselves of their US dollar reliance. While at the Consensus Distributed event, the assistant governor and director-general of the National Bank of Cambodia, Serey Chea, revealed the initial plans and set out the goals of the network. The central bank director claimed 12 other banks were trialling the new platform, which could arrive by the end of 2020. The DLT network according to Chea was created to make the cohesion between banks, E-wallet providers and customers more efficient.  Consumers are a key driver of the network’s creation. As any of you will know who have travelled to the beautiful country of Cambodia, most payments are done in US dollars. The local currency, the Riel, is often unused due to the high inflation which means 1 dollar equates to 4,000 Riels. The confusion often associated with making large payments will be washed away, Shea hopes with the creation of the network. Cambodian residents will also have the ability to make instant payments using mobile wallet apps and QR codes via the proposed payment network.  Alongside the network, Chea also announced that the National Bank had begun work on a cross border payment between themselves and Malaysia’s Maybank. The focus of this project will be for migrant worker remittances.  Much like their Asian counterparts China, Cambodia is looking to create and foster digital technologies. The National Bank has previously announced its central bank digital currency (CBDC), Project Bakong, is almost complete.

Monetary Authority of Singapore, Singapore Fintech Association & AMTD, Introduce Grant Program to Support Fintechs Crowdfund Insider 13th May 2020
The Monetary Authority of Singapore (MAS), Singapore Fintech Association (SFA), AMTD Group (NYSE: HKIB; SGX: HKB) and AMTD Foundation have joined in announcing a S$ 6 million “MAS-SFA-AMTD Fintech Solidarity Grant.” The new grant is designed to support Singapore based Fintech firms during the Coronavirus pandemic. Sopnendu Mohanty, Chief Fintech Officer of MAS, explained there is a surge in demand in the financial services industry around the region for solutions to address the need for remote digital services amidst the COVID-19 pandemic. Fintech firms have a great opportunity to step up activities during this period to provide these solutions. According to MAS, the Grant complements the S$ 125 million support package announced by MAS on April 8, 2020, to strengthen capabilities in the financial services and Fintech sectors. AMTD has provided an initial S$ 2 million to support the Singapore Fintech ecosystem and MAS will provide an additional S$ 4 million from the Financial Sector Development Fund, taking the total grant amount to S$6 million. Applications for the Grant will open on the 18th of May and will be available until December 31, 2021. The Grant is comprised of two components: (1) S$1.5 million Business Sustenance Grant (BSG). Eligible Singapore-based FinTech firms can receive a one-time grant for up to S$20,000 to cover day-to-day working capital expenditures, such as salaries and rental costs. The short-term assistance will help FinTech firms sustain their operations and retain their employees. The BSG is fully funded by AMTD’s contribution. (2) S$4.5 million Business Growth Grant (BGG). Eligible Singapore-based FinTech firms can receive up to S$40,000 for their first Proof of Concept (POC) with financial institutions on the API Exchange (APIX) [2] platform, and S$10,000 for each subsequent POC, subject to a total cap of $80,000 per firm for the entire duration of the grant. The BGG enables these companies to continue to innovate in partnership with financial institutions and create opportunities for growth. The BGG is jointly supported by AMTD and MAS. In addition, the BGG will provide funding for the salaries of undergraduate interns, capped at S$1,000/month per intern. This grant will support around 120 interns in the FinTech sector, assuming an average internship duration of 3 to 5 months. We hope to encourage FinTech firms to continue to offer internships and develop the local FinTech talent pipeline. Individual Fintech firms may apply for both BSG and BGG if they fulfill the eligibility criteria for both grants. SFA will administer and review the grant applications.

Bank Indonesia Reveals Six Monetary Policies to Keep Financial System Stable Jakarta Globe 11th May 2020
Since the coronavirus crisis began, Bank Indonesia has been strengthening its policy mix to stabilize the rupiah, control inflation, support financial system stability and prevent a further decline in economic activities by working closely with the government and the Financial System Stability Committee, or KSSK. Bank Indonesia Governor Perry Warjiyo revealed on May 11 that the central bank's policy mix contains six essential points. The first is to lower its seven-day reverse repo rate twice by 25 basis points to 4.5 percent. The second point is to stabilize and strengthen the rupiah by intensifying interventions in the spot market, domestic non-delivery forward market and by buying bonds in the secondary market. The third point in the policy mix has Bank Indonesia continuing to expand instruments and transactions in the money market and foreign exchange market by providing more hedging instruments against the rupiah through domestic non-delivery forward transactions, increasing foreign currency swap transactions and providing term repo for banking needs. The fourth point has the central bank injecting massive quantitative easing into the financial market and banks to encourage financing for businesses and kickstart a recovery of the national economy, So far in 2020, Bank Indonesia has injected around Rp 503.8 trillion into the financial system by buying bonds in the secondary market, providing extra liquidity for repurchase agreement, foreign currency swaps and a reduction in the rupiah statutory reserve requirement. The fifth point in the policy mix is to release macroprudential policies to encourage banks to finance businesses through reducing loan-to-value ratio provisions, macroprudential intermediation ratio (RIM) and lowering the rupiah statutory reserve requirement for business financing – especially for export-import operators and MSMEs – to counter the impact of the coronavirus crisis. The last point in the mix is to ease payment constraints for both cash and non-cash payment systems to encourage more economic and financial transactions.
MEDAC to simplify loan procedures for entrepreneurs The Edge Markets 11th May 2020
Entrepreneur and Cooperative Development Ministry (MEDAC) will simplify lending procedures for entrepreneurs, following various standard operating procedures (SOPs) they need to face in order to start their business. Its minister Datuk Seri Dr Wan Junaidi Tuanku Jaafar said this was due to many companies being affected by the implementation of the Movement Control Order (MCO) and the Conditional MCO which ends on June 9. "We have opened two bank channels and one cooperative as a financial source namely Bank Rakyat, SME Bank Bhd and Tekun Nasional. When the economy is fully open, entrepreneurs can operate their businesses as quickly as possible," he said. To date said the minister,  SME Bank Bhd has received about 1,000 loan applications and this indicates that many companies are keen to source financial resources provided by the government. "Many of the required methods and procedures have been simplified including the withdrawal process, and I have also advised Tekun Nasional not to delay the approval of loan applications," he said. Noting that many women entrepreneurs were also affected, Wan Junaidi said his ministry has distributed RM80 million to assist the group through Tekun Nasional.

Securities Commission to Allow for E-Wallets to Sell Capital Market Products; TNG eWallet Welcomes the Move Fintech News Malaysia 5th May 2020
The Securities Commission Malaysia (SC) announced on May 5 that it will facilitate the online distribution of capital market products such as unit trusts, through e-Services platforms like e-wallet or e-payment service providers. The Guidelines on Recognized Markets has been amended to introduce a new chapter on “e-Services platform”, which contains the registration requirements and ongoing obligations for e-Service providers. This amendment will allow operators of e-wallet or e-payment applications to partner with Capital Markets Services Licence holders to distribute capital market products to investors. E-wallets or e-payment operators which are currently subject to the oversight of another sectorial regulator will be required to obtain the prior approval from the said regulator before submitting their application to the SC. The SC had stated during its virtual press conference held on 16 April 2020 that it observed an increase in the number of online trading accounts being registered. At the same time, there has also been a shift among license holders towards using digital channels to distribute capital market products and services.
Government to help pay interest on mortgages, car loans The Jakarta Post 5th May 2020
The Indonesian government will broaden its loan interest subsidies to include mortgage loans (KPR), automotive loans (KKB), and loans taken out by micro, small and medium enterprises (MSMEs) as part of a debt relief program for those affected by COVID-19. The government is working with the Financial Services Authority (OJK) to prepare a debt relief program, according to a statement by the OJK issued on April 30. The announcement said borrowers with loans classified under “collectability one” (current) and “collectability two” (special mention) were eligible for the subsidies, as well as automobile loans under Rp 500 million and housing loans of type 21 and type 22 for properties of up to 70 square meters. The payments will be given for six months, from April to September of this year. The interest subsidies for loans under Rp 500 million will be 6 percent for the first three months and 3 percent for the remaining three months. For loans between Rp 500 million and Rp 10 billion, the interest subsidies will be 3 percent for the first half of the stimulus period and 2 percent for the second half. The country’s banking industry recorded an NPL rate of nearly 2.8 percent in February, the highest since May of last year, but the OJK said the risk profile of Indonesia’s financial institutions was still under control despite the high NPL rate.
BSP adopts relief measures in support of MSME sector Philippine News Agency 5th May 2020
The Monetary Board has approved prudential measures to assist the micro, small and medium enterprise (MSME) sector carry on with its business during the coronavirus disease 2019 (Covid-19) crisis, as well as hasten recovery and sustainability of their operations in the post-crisis period.  The first set of measures by the Bangko Sentral ng Pilipinas (BSP) are amendments to the regulatory capital treatment of exposures to MSMEs, which free up capital and enable supervised financial institutions to extend more credit to them.  These include the temporary reduction in the credit risk weights of loans granted to MSMEs that are current in status, and assignment of a lower risk weight for MSME exposures that are covered by guarantees.