| Market Development
Myanmar moves towards first-ever credit ratings The Nation 14th Aug 2015
Citi and Standard Chartered Bank have been appointed as Myanmar's sovereign-credit-ratings advisers. They will act as a bridge between the government and three international ratings agencies - Standard & Poor's, Fitch Ratings and Moody's. The government announced that the advisers would support Myanmar's efforts to enhance data collection and improve investor outreach. Under military rule for nearly six decades, the country has never been rated by any agency, which blocks its ability to reach out to international lenders.
Economic and Financial Developments in the Malaysian Economy in the Second Quarter of 2015 Bank Negara 13th Aug 2015
The Malaysian economy grew by 4.9% in the second quarter of 2015 The Malaysian economy recorded a growth of 4.9% in the second quarter of 2015 (1Q 2015: 5.6%), driven mainly by private sector demand. On the supply side, growth was underpinned by the major economic sectors. On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.1% (1Q 2015:1.2%). The private sector remained the key driver of growth during the quarter. Private consumption expanded at a more moderate rate of 6.4% (1Q 2015:8.8%) as households adjust to the implementation of the Goods and Services Tax (GST). Private investment grew more moderately by 3.9% (1Q 2015: 11.7%), due to a decline in spending on machinery and equipment, especially in the transportation segment, and slower investment in dwelling services. Growth in public investment turned negative in the second quarter (-8.0%; 1Q 2015: 0.5%), attributed mainly to the near completion of a few projects by public enterprises, which more than offset the positive growth of capital expenditure by the Federal Government. Meanwhile, public consumption recorded a higher growth of 6.8% (1Q 2015: 4.1%) following the stronger expansion in supplies and services expenditure amid sustained growth in emoluments.
All preparations for Yangon Stock Exchange in place by next month The Nation 13th Aug 2015
Although the launch of the Yangon Stock Exchange (YSX) has been pushed back to the end of November or early December, Myanmar will ensure proper systems for the exchange will be in place by the end of this month, a government official said. Maung Maung Thein, the deputy finance minister and chair of the Securities and Exchange Commission (SEC), said that more than 80 per cent of the preparations for YSX have been completed so far. The electronic systems to be used in the exchange should be ready two or three months before the official launch. He said the listing criteria and rules and regulations for selling and buying shares would be unveiled later this month and the final list of service providers would be transparently announced soon.
Improving Lives and Securing Better Futures With Financial Literacy Jakarta Globe 13th Aug 2015
Since increasing numbers of Indonesians are entering the middle class for years to come, thus proliferating purchasing power and disposable income, financial literacy has become a necessity to manage personal finances and to guarantee a comfortable life in the future. Financial literacy signifies someone’s total comprehension and awareness of financial matters, especially those of a personal nature. The lack of financial literacy can lead to poor financial decisions that can adversely impact an individual’s financial health. Nevertheless, evidence from a 2013 survey on financial literacy conducted by the Financial Services Authority (OJK) in 20 provinces across Indonesia with 8,000 respondents indicates that Indonesia has a relatively low financial literacy rate.
Improving Lives and Securing Better Futures With Financial Literacy Jakarta Globe 13 Aug 2015
Since increasing numbers of Indonesians are entering the middle class for years to come, thus proliferating purchasing power and disposable income, financial literacy has become a necessity to manage personal finances and to guarantee a comfortable life in the future. Financial literacy signifies someone’s total comprehension and awareness of financial matters, especially those of a personal nature. The lack of financial literacy can lead to poor financial decisions that can adversely impact an individual’s financial health. Nevertheless, evidence from a 2013 survey on financial literacy conducted by the Financial Services Authority (OJK) in 20 provinces across Indonesia with 8,000 respondents indicates that Indonesia has a relatively low financial literacy rate.
About 8 out of 10 employers in financial services industry struggling for talent the Edge Markets 11th Aug 2015
Almost eight out of every 10 employers in the financial services industry in Malaysia are struggling to find talent, according to two new research reports by the Asian Institute of Finance (AIF). The reports, titled Talent Gaps in the Financial Services Industry in Malaysia and Skills Gaps in the Financial Services Industry in Malaysia present the results of surveys conducted with over 3,200 finance professionals across banking, capital markets, Islamic finance and insurance in Malaysia.
Asset Management
Ringgit volatility tests foreign bond investors’ faith Brunei Times 17th Aug 2015
Foreign investors in Malaysia’s bond markets have stayed put through months of economic and political uncertainty but a sudden spurt in currency volatility appears to be testing that allegiance. Foreign fund managers and other investors have been heavily invested in Malaysia - they hold nearly half of outstanding government bonds - through the ringgit’s slide in the first half of the year on worries about US monetary policy tightening, falling global oil prices and a scandal at a local state fund. They sold some assets in July as the ringgit’s losses mounted, cutting holdings to 206.8 billion ringgit (US$50.7 billion), the lowest since August 2012.
Singapore mulls currency devaluation The Rakyat Post 17th Aug 2015
Singapore is caught between a rock and a hard place: easing its exchange rate-based monetary policy would strengthen its export competitiveness after China’s devaluation of its yuan but may drive out capital and raise borrowing costs in a slow economy. Shrinking factory output, an economic contraction and months of falling consumer prices have revived speculation the Monetary Authority of Singapore (MAS) may ease policy at its next review in October. China’s currency devaluation to prop up the world’s second-largest economy has only added to the expectations. Yet, the MAS said last week its current monetary policy remains appropriate.
No need to peg ringgit to US dollar: Zeti New Straits Times 13th Aug 2015
Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz said there is no need to peg the ringgit to the US dollar to address the currency's depreciation. She said there is no need for capital controls either as the current flexible exchange rate regime helps Malaysia to adjust. Malaysia pegged the ringgit to the greenback at RM3.80 during the Asian Financial Crisis and removed it to float in 2005.
BNM: Reserves are enough, no need to peg ringgit The Rakyat Post 13th Aug 2015
Malaysia has enough international reserves to sustain its economy and trade dealings, even though the ringgit’s value has dropped over 20% since September last year. Bank Negara Malaysia (BNM) governor Tan Sri Zeti Akhtar Aziz today said the central bank isn’t worried about the reserves falling as it is a normal occurrence in tumultuous times. “We saw the same happening back in 2011 and when times improved, we were able to build up our reserves again,” she said when announced the second quarter gross domestic product growth of 4.9% today. “What matters now is that we have enough reserves, which stood at US$96.7 billion as at July 31 this year. “It is sufficient to finance 7.6 months of retained imports, significantly higher than the three months international threshold.
OJK: Capital Market Can Cover for Banks Tempo 11th Aug 2015
Muliaman Hadad, chairman of the Financial Services Authority (OJK), said that the Indonesian capital market industry developed into an important funding alternative. The capital market is able to provide long term financing that can cover for banks' limitation in doing so. Over the past five years, Hadad said, capital markets managed to pool in Rp595 trillion from bond and stock issuances. "The capitalization as of the beginning of [August] had almost reach Rp5,000 trillion, an increase of more than 60 percent in five years," Hadad said when attending the 38th anniversary of the Indonesia Stock Exchange (IDX) on Monday, August 10.
BPI profit growth slows in second quarter Business World 11th Aug 2015
Ayala-led Bank of the Philippine Islands (BPI) boosted its profit by a modest 0.1% in the second quarter -- slowing from first quarter’s pace -- as narrower spreads and higher funding cost dulled trading gains and the strong results from its core lending business. The country’s third largest bank in asset terms reported P4.431 billion in net income attributable to shareholders in the three months ended June, slightly up from P4.426 billion a year ago. In the first quarter, BPI earnings earnings jumped by an annual 27%. Net interest income rose 9.3% to P9.466 billion in the second quarter, thanks to a 15.7% expansion in average assets base but “partly tempered by the decline in spreads,” BPI said in a disclosure to the stock exchange.
Weakening remittances take sheen off Philippine peso Brunei Times 11th Aug 2015
The Philippine peso, languishing at a five-year low against the dollar, will lose more ground to the greenback in the coming months as remittances from millions of Filipinos overseas slow and foreign investors rotate out of the Manila stock market. The Philippines is one of the fastest-growing economy in the region thanks to strong private demand. The peso, unlike many emerging-market currencies in Southeast Asia, has been relatively resilient in the face of volatile capital flows ahead of an eventual rise in US interest rates. While it has weakened more than two per cent against the greenback so far this year, the decline is less than the falls in the Thai baht, Indonesian rupiah and Malaysian ringgit.
Malaysian market in correction mode, sentiment remains weak The Star 11th Aug 2015
The ringgit seems to be finding some resistance at breaching the 3.93 mark against the US dollar. However, it brings little respite to the stock market as poor sentiments pushed Bursa Malaysia lower – the third consecutive day of decline. At the close yesterday, the local bourse’s benchmark FTSE Bursa Malaysia KL Composite Index (FBM KLCI) shed close to 30 points to 1,654.37. In the last three days, the key barometer for the local stock exchange has shed 71.19 points. Since hitting a peak of 1,862 points on April 21, the market has dropped 11% based on yesterday’s close.
Banking
Central Bank Talks Up Stability amid Economic Challenges The Irrawaddy 18 Aug 2015
The Central Bank of Myanmar pledged Tuesday to assist private banks that may run into financial difficulties, looking to address recent speculation that some financial institutions were heading for a crash due in part to the recent depreciation of the kyat. Central Bank officials held a meeting with representatives from several private banks on Monday before declaring in a statement Tuesday that reports of the latter’s collective slide, including Kanbawza (KBZ) Bank and the Tay Za-founded Asia Green Development (AGD) Bank, were baseless. Sett Aung, deputy governor of the Central Bank, told the state run Myanma Alin newspaper on Tuesday that the Central Bank would provide financial support to private banks that faced serious difficulties, according to regulations.
SCB banking on close partners in Myanmar, VN branch this year The Nation 17th Aug 2015
Siam Commercial Bank (SCB), Thailand's third-largest bank by assets, is hoping to generate significant income growth in CLMV countries - Cambodia, Laos, Myanmar and Vietnam - in the coming years, after establishing close business collaboration with partner banks in Myanmar and setting up a branch in Vietnam by the end of this year. SCB's overseas business is currently quite small, and in CLMV it does not have its own branches in either Myanmar or Vietnam. The bank does, however, have a Vientiane branch in Laos, while in Cambodia it has four branches run by its local affiliate, Cambodian Commercial Bank.
Banking sector not badly affected by economic slowdown, says Maybank CEO The Malaysian Insider 17th Aug 2015
The performance of the banking sector is not badly affected by the slowdown of the country's economy, which is mostly due to external factors, says Malayan Banking Bhd Group (Maybank) president/chief executive officer, Datuk Abdul Farid Alias. He said the sector remained well-capitalised with the total capital ratio at 15.2% currently, compared with 14.8% in December 2010. "The volatility now is seen on the foreign exchange. The ringgit is not the only one that has been affected by this. We should be glad that we are not the (Russian) rouble, which is down by 40% since September last year, while the Brazilian currency is down by about 35% during the same period.
Credit growth on target to hit 15-17 percent VietnamPlus 14th Aug 2015
Credit growth by August 10 reached 8.3 percent compared to December last year, much higher than during the same period last year, said director of the State Bank of Vietnam's Credit Department, Dang Tien Dong. The rise was only 3.7 percent between early January and end July last year. At this pace, Dong expected the country's credit growth this year to reach 15-17 percent in keeping with the target fixed by the central bank. Such fast-paced credit growth was attributed to a sharp rise in lending to infrastructure, consumption and real estate sectors.
Banks reinstate loans program for micro and small businesses Jakarta Post 14th Aug 2015
Three state banks have signed a partnership agreement for financing a people’s business credit (KUR) program, officially relaunching the program, which had been put on hold for more than seven months. The lenders — Bank Rakyat Indonesia (BRI), Bank Mandiri and Bank Negara Indonesia (BNI) — signed the agreement on Thursday with the Cooperatives and Small and Medium Enterprises Ministry. The KUR is a government-backed program that aims to disburse micro loans to owners of small businesses across the country at lower interest rates than most micro loans, made possible by an insurance plan provided by the government through state credit insurance firms Perum Jamkrindo and Askrindo.
Swiss bank Julius Baer appoints Singaporean to head Asia Pacific unit Channel NewsAsia 13th Aug 2015
Swiss private bank Julius Baer on Thursday (Aug 13) announced it has appointed Singaporean banker Jimmy Lee to become its new head of Asia Pacific come Jan 1, 2016. Mr Lee, who was most recently the Market Group Head of Hong Kong at Credit Suisse and has more than 25 years of experience in the industry, will take over from Dr Thomas Meier next year, even though he will join the company first on Oct 1, the press release said. Besides heading the Asia Pacific unit, Mr Lee will also become a member of Bank Julius Baer's Executive Board from Jan 1, it added.
Mandiri expects to secure more hedging contracts Jakarta Post 13th Aug 2015
Publicly listed lender Bank Mandiri expects to secure more hedging contracts from local companies later this year as financial risks are growing as a result of the further depreciation of the rupiah against the US dollar, a bank executive has said. Mandiri treasury and market director Pahala N. Mansury said the bank was developing new hedging and derivative products to cater to its corporate clients’ needs. “A lot of them currently opt to use forwards, but more and more companies are beginning to set their sights on cross currency swaps because the latter enables them to hedge businesses against both currency and interest rate fluctuations,” he said recently.
Singapore banks sees benefits as yuan devaluation boosts rates Singapore Business Review 13th Aug 2015
Singapore's two largest banks said they stand to benefit from higher local interest rates and the weakening in the city's currency that followed the recent devaluation of the Chinese yuan. Executives from DBS Group Holdings Ltd and Oversea-Chinese Banking Corp said the drop in the Singapore dollar should support local interest rates, which in turn is positive for the banks' earnings. The Chinese yuan recorded its biggest two-day slump in 21 years this week amid concerns about a further economic slowdown in Asia's biggest economy, where the biggest Singaporean banks have been growing their business.
ASEAN banks will remain resilient: S&P Brunei Times 12th Aug 2015
ASEAN banks will remain resilient even if rising interest rates and increasing houseld debt are threatening the quality of the region’s banking assets. In its latest report titled ASEAN Banks Will Remain Resilient to Rising Risks released yesterday, global credit ratings agency Standard and Poor’s (S&P) said the asset quality of ASEAN banks can weaken over the next 12-18 months due to the buildup of risk. S&P said such risk stemmed from higher property prices, mounting household debt, tight liquidity and rising interest rates. The ratings agency said the “healthy recurring profits and adequate capital cushions” of ASEAN banks combined with strong government support will buffer against downside risks.
Commercial banks' loan growth 4.6% in Q2, BOT says The Nation 12th Aug 2015
Commercial banks saw steady lending growth of 4.6 per cent year on year for the second quarter, while setting aside more provisions to cope with drops in loan quality, particularly for loans to small and medium-sized enterprises, according to the Bank of Thailand (BOT). Jaturong Jantarangs, senior director at the BOT, said commercial banks' loan growth became steady after consistent slowdowns from private investment and spending since the fourth quarter of 2012. The first quarter's loan expansion was 4.3 per cent year on year. Business loans, which accounted for 68.7 per cent of total lending, increased by 3.2 per cent year on year in the April-June period from higher figures in the financial, property, manufacturing and utility groups, he said.
Windfall profits over for Philippine lenders – S&P The Philippine Star 12th Aug 2015
Standard and Poor’s (S&P) believes the days of windfall profits for Philippine banks are over amid the expected deterioration of assets quality of banks in Southeast Asia over the next 12 to 18 months. S&P credit analyst Ivan Tan said earnings of Philippine banks fell in 2014 due to an industry-wide slump in one-off gains from their trading activities. “The banking system posted its first decline in net profits in five years in 2014 as the hefty gains from selling government bonds to institutional investors decreased substantially,” Tan said. The report said Philippine banks’ return on average assets dropped to 1.27 percent in 2014 from a peak of 1.61 percent in 2013.
OJK Says Banks Remain Strong amid Rupiah Downtrend Tempo 11th Aug 2015
The Financial Services Authority (OJK) claims Indonesia's financial services industry is still strong enough to withstand the rupiah correction. OJK made the conclusion based on the result of stress tests it conducts routinely against the bank. OJK chief Muliaman Hadad said the rupiah downtrend against the US dollar has little effect to Indonesia's banking industry. According to Muliaman, Indonesia still has a huge economic potential. He is calling on national banks to focus on said potential in hopes for improvement in the third and fourth quarter of this year.
Banks Ready for Lower Deposit Guarantee The Nation 11th Aug 2015
The Thai Bankers Association said yesterday its members are ready for the lower deposit protection ceiling, thanks to their financial strength and preparations made over the past months. Starting today, the cap on deposit accounts automatically protected under the Deposit Insurance Act will be reduced to Bt25 million per bank from Bt50 million. Kobsak Duangdee, secretary-general of the association, said that at the end of 2014, the banking system's capital-adequacy ratio stood at 16.8 per cent, well above the requirement of 8.5 per cent.
Retail banking market upbeat VietnamPlus 11th Aug 2015
Vietnam is expected to lure many foreign banks, especially those operating in the retail segment, once the country removes all technical barriers in the banking sector this year as committed when the nation joined the World Trade Organisation. The elimination of the barriers is expected to be a breath of fresh air, helping the retail banking market in Vietnam thrive in the time ahead. According to Sacombank CEO Phan Huy Khang, opportunities are available for Vietnamese banks to boost their retail activities.
Mizuho Bank Open for Business Myanmar Business Today 11th Aug 2015
Japan-based Mizuho Bank has opened their first branch in Yangon on August 3, marking the bank’s official entrance into the country. The lender is one of the largest financial services company in Japan, with over $1.6 trillion in assets. It was one of nine international banks that received licences in October last year to operate in the country. According to a company statement, the Yangon Branch is capable of providing a full line-up of banking services, including deposits, loans, and domestic and foreign exchange, and the branch will also provide more comprehensive e-banking and other financial services.
E-Payments
Myanmar's e-commerce outlook bright The Nation 17th Aug 2015
Myanmar's first online wholesale market has drawn over 30,000 visitors in 10 days after the unofficial launch, convincing the shopping platform operator Kaymu of Myanmar's e-commerce potential. The wholesale category was officially launched on August 11 as a link for buyers and sellers in Myanmar and overseas. It is part of www.kaymu.com.mm, an online shopping platform that has witnessed 20-30 per cent growth in visitor numbers per month since its launch 18 months ago. "We have seen very significant growth over the past few months," said Max Langer, country manager of Kaymu, which prides itself as the top online marketplace in emerging countries.
Vietnamese retailers urged to expand mobile e-commerce VietnamPlus 14th Aug 2015
Vietnamese retailers should pay heed to mobile e-commerce to improve product access for consumers and promote market competitiveness, an official of the Ministry of Industry and Trade said on August 14. Wireless electronic equipment such as tablets and mobile phones are more than just communication and information searching devices, also serving as an interaction channel between retailers and consumers, Director of the ministry’s Vietnam E-commerce and Information Technology Agency (VEITA) Tran Huu Linh said at a workshop in Ho Chi Minh City. The department reported that the online shopping value per capita in Vietnam is about 145 USD per year while the revenue of the e-commerce B2C (business-to-consumer) model reached some 2.97 billion USD, accounting for 2.12 percent of the country’s total retail sales.
MPU plans joint card with Japanese and Chinese firms Myanmar Times 13th Aug 2015
Myanmar Payment Union is planning to launch a new product in conjunction with two foreign companies, and is now awaiting approval from the Central Bank of Myanmar, according to MPU’s chief executive officer U Zaw Lin Htut. Myanmar Payment Union is working with JCB of Japan and Union Pay of China for a co-branded card. “Now we are awaiting the Central Bank’s approval, and will carry on depending in its decision,” he said. An official with the Central Bank’s card department said that the submission of the international payment card is still being examined by governor U Kyaw Kyaw Maung, and declined to comment further.
Insurance
Malaysia: Weaker ringgit affects general insurance market growth Asia Insurance Review 17th Aug 2015
The Malaysian non-life insurance industry is expected to grow at 3-4% this year, according to the General Insurance Association of Malaysia (PIAM). This forecast represents a downward revision from the previous forecast of 5.5-6.5% given in February. The expected slower growth is attributed to prevailing economic headwinds and the weakening of the ringgit. PIAM Chairman Chua Seck Guan said that the general insurance industry's gross written premiums (GWP) grew at a slower rate of 2.3% to MYR9.07 billion (US$2.23 billion) in the first half of 2015, compared with 6.4% growth in 1H14. The association said the factor that had severely impacted the industry was the goods and services tax that took effect from 1 April, which had somewhat reduced people’s purchasing power.
PH seen facing $528B “mortality protection” gap Philippine Daily Inquirer 17 Aug 2015
BY 2020, the Philippines is facing a shortfall of $528 billion in resources needed to sustain households in case the bread-winner in the family is unable to function, based on estimates by regional insurance giant AIA. The shortfall refers to mortality protection gap, which in the Asia-Pacific region is already estimated at $58 trillion, based on a new report by Zurich-based global reinsurer Swiss Re. This underscores the need for greater insurance planning, American banking giant Citigroup said in a press statement. Citi, which teamed up with AIA at the end of 2013 to form Asia’s largest bancassurance agreement, said the report showed that much was needed to be done to close the protection gap in the region.
Insurance growing with rising awareness PPP 13th Aug 2015
Growth in the general insurance sector was up 20 per cent for the first six months of the year, as the Kingdom continues to experience high growth and foreign firms pour money into the nascent industry, according to the president of the Insurance Association of Cambodia. Huy Vatharo, president of the Insurance Association of Cambodia, revenues for the first half were $ 32.2 million, compared to the same period last year, when the industry recorded $26.8 million. “The increase is thanks to the political situation, the people’s awareness of insurance service and direct investment from foreign investors,” he added. According to Vatharo, 38.7 per cent of profits came from fire-related policies, 16.3 per cent from health insurance and 15.8 per cent from vehicular policies. Youk Chamroenrith, Managing Director of Forte Insurance, said despite the sector’s low base, services grew because of the growth and a newcomers to the market contributing to increased awareness among Cambodians. At Forte, growth was recorded around 23 per cent, or more than $15 million during the same period, Chamroenrith said.
PIAM: Motor insurance growth has slowed The Rakyat Post 13th Aug 2015
The General Insurance Association of Malaysia (PIAM) has revised growth for the sector’s gross written premiums to 3-4% for 2015 from 5.5-6.5% previously. This was due to the anticipated weakening of the ringgit against the US dollar, cautious economic outlook, as well as moderation in consumer spending following the Goods and Services Tax (GST) implementation. Chairman Chua Seck Guan said the motor insurance sector which accounted for almost half (45.1%) of the business market share, recorded a slow growth of 2.1% in the first half of 2015 compared with 8.3% in the same period last year.
General insurers see lower growth around 4% The Star 13th Aug 2015
The General Insurance Association of Malaysia (PIAM) has revised downwards the projected growth for the general insurance industry to between 3% and 4% for 2015. It previously set a growth rate of 5.5% to 6.5% for the year. PIAM chairman Chua Seck Guan said on Thursday the target was revised after factoring the present challenging and operating landscape. He said the general insurance industry grew by 2.3% to RM9.07bil in gross written premiums from January to June 2015 compared with the same period a year ago.
Insurers Want Consortium for Infrastructure Insurance Asia Insurance Review 12th Aug 2015
The insurance industry is pushing for the formation of an infrastructure insurance consortium that will be able to accommodate the insurance of government infrastructure projects. Julian Noor, executive director of the Indonesian General Insurers Association (AAUI), said the government tends to involve foreign investors in infrastructure development, who prefer to use foreign insurance and reinsurance services as well. The existence of a consortium, he said can help local insurers to capture the business opportunities presented by state infrastructure projects—estimated to worth Rp5,319 trillion until 2019.
Market Regulation
Yangon Stock Exchange listing criteria lacking protection for investors Myanmar Times 17th Aug 2015
The listing criteria for Myanmar’s first stock exchange have been published, but important rules to protect shareholders are missing, said experts. Unless more detailed regulations are added, investors will be at risk of abuse by unscrupulous companies, they said. The Yangon Stock Exchange (YSX) is due to open later this year. It is owned by Japan’s Daiwa Institute of Research, Japan Exchange Group and state-owned Myanma Economic Bank, and will become the country’s first modern bourse. Companies must meet the listing criteria to attempt an initial public offering (IPO), which allows the public to buy shares, or part ownership, of the company.
Most important RI banks to be announced after new law Jakarta Post 15th Aug 2015
The Financial Services Authority (OJK) says that it will only announce the names of the domestic systematically important banks (DSIBs) after the law on the financial system stability net (JPSK) is passed. Speaking at a press conference on financial stability, OJK chairman Muliaman D. Hadad said that it was still holding talks with Bank Indonesia (BI) about which banks should be considered DSIBs. “The number is not final yet, but we will make it public after the JPSK Law is passed because the DSIBs are part of that law,” he said on Thursday. The DSIBs are banks whose financial woes could widely impact the economy due to their large size and the degree to which they are integrated into the whole financial system.
PDIC backs bills protecting bank clients The Philippine Star 12th Aug 2015
State-run Philippine Deposit Insurance Corp. (PDIC) is strongly pushing the enactment of proposed measures that would benefit depositing public affected by bank closures. PDIC said House Bill 4392 of Rep. Nelson Collantes and Senate Bill 2268 of Sen. Sergio Osmeña pushing for amendments to PDIC’s Charter would institutionalize much-needed reform measures in the field of deposit insurance, bank resolution and receivership, and liquidation of banks. The proposed changes would enable PDIC to effectively provide protection to the depositing public via more expeditious payment to depositors of their deposit insurance claims, safeguard the banking system from disruptions resulting from bank failures, and promote financial inclusion to the unbanked areas.
BSP tightens guidelines on deposits, securities investments The Philippine Star 12th Aug 2015
The Bangko Sentral ng Pilipinas (BSP) has imposed stricter guidelines on the funds received from customers for securities investments and deposits to boost efforts in protecting the welfare of financial consumers. The BSP has directed banks to segregate the funds of customers received under a securities brokering arrangement from deposit taking activities. As such, a new account in the books of banks called “broker customer account” would have to be introduced by the banks. The “broker customer account” makes clear that funds recorded under this item are not to be classified as “deposits.” “They are transactional in nature because there is an instruction to use them to purchase securities,” the BSP said in a statement.
Dooc tightens guidelines on insurer IMAs Business Mirror 11th Aug 2015
The Insurance Commission (IC) is imposing stricter regulations on investments made by insurance companies indirectly through the so-called investment-management agreements (IMAs) with fund managers. Under Circular Letter 2015-41-A, Insurance Commissioner Emmanuel F. Dooc is requiring prior approval by the IC before insurance companies may enter into IMAs with fund managers to invest their trust funds. The application for the IC’s approval of the IMA shall be accompanied by a board resolution authorizing the placements under IMA, a copy of the IMA, and audited financial statements of the investment or fund manager for the past three years.
OJK wants small foreign-owned banks to upgrade class The Jakarta Post 11th Aug 2015
The Financial Services Authority (OJK) will require the foreign owners of small locally incorporated lenders to improve their grades by injecting additional capital or face possible business restrictions. OJK chairman Muliaman D. Hadad said that the financial regulator would summon the banks in question and their owners in the near future. “I want these foreign-owned local banks to contribute more to the economy and the banking industry. One way I expect them to do that is by increasing capacity through capital injection, so that they can cover more business activities,” he said recently.
Banks told to separate deposits from securities Manila Standard Today 11th Aug 2015
The policy-setting Monetary Board of the Bangko Sentral ng Pilipinas issued new guidelines to segregate clients’ investments in securities from deposits in a bid to protect the welfare of investors. Bangko Sentral said in a statement the board approved the guidelines for segregating the funds of customers received by banks under a securities-brokering arrangement from the deposit-taking activities of these banks. “The segregation is undertaken by introducing a new account in the books of the banks which are called broker customer account,” Bangko Sentral said. Bangko Sentral said under the previous practice, banks would book as deposits the money they received from clients who wish to purchase securities. The bank is acting as a securities broker for the client under this transaction, it said.
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