IFR 03.08.2019

“We’ve been able to navigate the choppy waters so far ... we have

ITûWITHINûOURûMEANSûTOûHITûTHISûûPLUSû2O4%ûTARGETûBYûv

STANDARD CHARTERED CEO BILL WINTERS, P

Trio steady Bank of Jinzhou

4HREEûSTRATEGICûINVESTORSûHAVEûAGREEDûTOûTAKEû
stakes in BANK OF JINZHOU as the Chinese
government seeks to save the country’s
TROUBLEDûLENDERSûTHROUGHûMARKET
BASEDû
measures, with more policy easing on the
WAYûTOûEASEûSTRESSûINûTHEûlNANCIALûSECTOR
Industrial and Commercial Bank of China
ANDûTWOûSTATE
OWNEDûASSETûMANAGEMENTû
companies will take stakes in the bank,
assuaging concerns that it would become
THEûNEXTûLENDERûTOûBEûTAKENûOVERûBYûTHEûSTATEû
after regulators took control of Baoshang
Bank in May.
)#"#û&INANCIALû!SSETû)NVESTMENT ûAû
SUBSIDIARYûOFû)#"# ûWILLûTAKEûAûûSTAKEû
BYûINJECTINGûUPûTOû2MBBNû53M û
WHILEû#HINAû#INDAû!SSETû-ANAGEMENTûWILLû
TAKEû ûTHEûCOMPANIESûSAIDûINûSEPARATEû
announcements.
#HINAû'REATû7ALLû!SSETû-ANAGEMENTûSAIDû
it would also invest in the bank, but it has
yet to announce how much. People familiar
WITHûTHEûMATTERûSAIDûITûISûEXPECTEDûTOûTAKEû
AROUNDûAûûSTAKE
4HEûTHREEûNEWûINVESTORS ûBYûBUYINGûû
OFûSHARESûFROMûEXISTINGûINVESTORS ûWILLû
become the largest shareholders of the
(ONGû+ONG
LISTEDûBANK ûWHICHûPREVIOUSLYû
HADûAûDISPERSEDûSHAREHOLDERûSTRUCTUREû4HEû
TWOû!-#SûAREûSTATE
OWNED ûWHILEûTHEû
Ministry of Finance and Central Huijin
Investment, which is directly managed by
sovereign wealth fund China Investment
Corp, own a combined majority stake in
ICBC.

!ûPERSONûWHOûPARTICIPATEDûINûTHEûDEALûSAIDû

the government did not want to appear to

take the lead this time because regulators

THINKûINVESTORSûINûAû(ONGû+ONG

LISTEDû

company may not want the bank to be

CONTROLLEDûBYû"EIJINGûEVENûTHOUGHûOFlCIALSû

from the People’s Bank of China’s regional

OFlCEûINû,IAONINGûWILLûJOINûTHEûBANKSû

management team later.

h4HEûMOSTûPRESSINGûCHALLENGEûISûITSûCREDITû

risks in the interbank market,” the person

said. “Purchasing old shares, rather than

ISSUINGûNEWûSHARESûISûTHEûMOSTûEFlCIENTûWAYû

to save it from credit worries.”

STILL CONCERNED

But onshore investors are still concerned

ABOUTû"ANKûOFû*INZHOUSûCREDITû)TSû

CERTIlCATESûOFûDEPOSITûDUEûTOûMATUREûATûPARû

ONû!UGUSTûûWEREûQUOTEDûATûAûCASHûPRICEûOFû

ûANûUNUSUALLYûDEEPûDISCOUNTûACCORDINGû

TOû2ElNITIVûDATA

4HEûBANKSû53BNû!DDITIONALû4IERûû

BONDSûCALLABLEûINûûWEREûBIDûATûAûCASHû

PRICEûOFûûACCORDINGûTOû2ElNITIVûDATAû)TSû

SHARESûHAVEûBEENûSUSPENDEDûSINCEû!PRILûû

after it missed a deadline to publish its

annual results.

h)NûTHEû"ANKûOFû*INZHOUûCASEûWEûSEEûTHEû

government is trying to support the

troubled bank and minimise the impact on

THEûCAPITALûMARKETSvûSAIDû$AVIDû9INûAûVICE

president at Moody’s.

4HEû!-#SûWEREûESTABLISHEDûTOûDEALûWITHû

STRESSEDûASSETSûINû#HINASûlNANCIALûSYSTEMû

ANDûCOULDûHAVEûBOUGHTû"ANKûOFû*INZHOUSû

bad loans directly, but Yin said they would

HAVEûBEENûSOLDûATûAûSTEEPûDISCOUNTûINmICTINGû

losses on the bank.

By becoming major shareholders, the

THREEûINVESTORSûCANûHELPû"ANKûOFû*INZHOUû

improve its internal risk controls,

RESTRUCTUREûDEBTSûANDûMAKEûDEBT

TO

EQUITYû

swaps after they have had a look at the

bank’s balance sheet, he said.

SPILLOVER EFFECT

!NûOFlCIALûWITHûTHEû.ATIONALû

Development and Reform Commission,

WHOûDRAFTEDûAûGUIDELINEûONûDEBT

TO

EQUITYû

swaps published last week, said China has

many regional banks similar to Bank of

*INZHOUûTHATûHAVEûPLAYEDûAûROLEûINû

developing local economies and gained

PROlTSûBYûBUILDINGûSTRONGûRELATIONSHIPSû

with local companies.

h4HEûFAILUREûOFûSUCHûBANKSûWILLûHAVEû

SIGNIlCANTûSPILLOVERûEFFECTSûTOûREGIONALû

economies and will cause risks to the

lNANCIALûSYSTEMvûTHEûOFlCIALûSAID

h!ûVIABLEûWAYûISûTOûHELPûBANKSûGOûTHROUGHû

THEIRûDIFlCULTIESûTHROUGHûMARKET

BASEDû

principles, rather than taking them over or

letting them go bankrupt. Neither would be

GOODûTOûIMPROVEûMARKETûCONlDENCEv

4HEûGOVERNMENTûWILLûALSOûEASEûSOMEû

regulations to encourage more large banks

WITHûHIGH

QUALITYûASSETSûTOûPARTICIPATEûINû

DEBT

TO

EQUITYûSWAPS

Yanfei Wang, Daniel Stanton

CIMB dismisses Hong Kong IB team

CIMB GROUP û-ALAYSIASûSECOND
BIGGESTûBANKûINû
asset terms, has dismissed its investment
banking team in Hong Kong in response to
STRONGûCOMPETITIONûINû.ORTHû!SIA ûACCORDINGû
to people familiar with the situation.
4HEûTEAM ûCOMPRISINGûABOUTûûBANKERS û
was dismissed last month, said the people.
Marcella Chan, head of investment banking
ANDûCORPORATEûlNANCEûINû(ONGû+ONG ûISû
staying to help with the transition and will
leave after that, said the people.
4HEûTEAMûWASûTOLDûTHATûTHEûBANKûHASû
decided to shift its focus away from the
HIGHLYûCOMPETITIVEû.ORTHû!SIANûMARKETS û
said one of the people.
#)-"ûCONlRMEDûITûWASûENDINGûITSû)"û
business in Hong Kong.
h&OLLOWINGû#)-"û'ROUPSû0AN
!SIANû
COLLABORATIONûWITHû#HINAû'ALAXYû

International, CIMB has also recalibrated its

investment banking business. Given the

strong synergy with CGI in Hong Kong, the

recalibration also entails the cessation of

CIMB’s IB business in Hong Kong, in

alignment with our regional business

OBJECTIVESvûSAIDû*EFFERIû(ASHIMû#%/ûOFû

CIMB Investment Bank.

h%XISTINGûCLIENTSûOFû#)-"Sû)"ûBUSINESSûINû

Hong Kong will continue to be supported

through our strong collaboration with CGI,”

he said in an emailed statement.

#)-"ûSOLDûAûûSTAKEûINûITSûINTERNATIONALû

BROKERAGEûBUSINESSûTOû#HINAû'ALAXYû

3ECURITIESûINûû4HEûJOINTûVENTUREûRUNSûAû

cash equities business comprising

institutional and retail brokerage, equities

research and associated securities businesses

INû)NDONESIAû3INGAPOREû4HAILANDû(ONGû

Kong, India, South Korea, the UK and the US.

CIMB has arranged one China ECM deal

THISûYEARûTHEû(+Mû53M  û(ONGû

+ONGû)0/ûOFû!OYUANû(EALTHYû,IFEû'ROUPûINû

-ARCHûACCORDINGûTOû2ElNITIVûDATA

CGI arranged three Hong Kong IPOs so far

this year, with the biggest being the

HK$1.16bn listing of Zhejiang New Century

Hotel.

CIMB had already scaled down its Hong

Kong equity capital markets and investment

BANKINGûOPERATIONûINûûINûVIEWûOFûTHEû

competition.

Chris Marshall, head of ECM and

SYNDICATEûFORû.ORTHû!SIAûANDû2OGERû,AMû

MANAGINGûDIRECTORûHEADûOFûEQUITY

LINKEDû

ORIGINATIONû(ONGû+ONGûANDû4AIWANû%#-û

left at the time.

Fiona Lau