Mizuho has made a push to increase its
presence overseas. Last week, it announced
that it had been granted a category 4 licence
from the Dubai Financial Services Authority.
It has had a presence in Dubai since 2007
through its corporate bank, although the
new licence will allow it to expand into debt
capital markets in the Middle East.
It is also looking to expand its footprint
INûLEVERAGEDûlNANCEûINûTHEû53 û3IMONû
Walker, its head of loan markets and
syndicate, told IFR in November.
Sakai joined Industrial Bank of Japan in
1984, which later merged with two other
banks to form Mizuho.
He was appointed head of Mizuho
Securities in 2016 and has previously
headed up the international banking and
investment banking divisions.
THOMAS BLOTT
The rules are designed to limit systemic
risk and improve corporate governance
within the banking sector.
Last month, the CBRC issued new
RULESûONûCOMMERCIALûBANKSûLIQUIDITYûRISKû
management with the aim of shifting
banks’ reliance from short-term market
funding to obtaining deposits.
The CBRC also issued guidelines this
month banning the use of entrusted loans –
a common feature in shadow banking – to
INVESTûINûBONDS ûlNANCIALûDERIVATIVESûANDû
asset management products.
h9OUVEûSEENûTHISûINTENSIlEDûREGULATORYû
effort since the 19th Party Congress
because there is a consensus among the top
leadership about the need to rein in credit
GROWTHûTOûSAFEGUARDûlNANCIALûSTABILITYûINû
China,” said Qiang Liao, senior director at
S&P.
“The new regulations on entrusted loans
are designed to prevent banks moving
loan-like assets off balance sheet. I think
that shows the forcefulness of the CBRC in
cracking down on shadow banking.”
Most analysts reckon that China’s big
four banks – Agricultural Bank of China,
Bank of China, China Construction Bank
and Industrial and Commercial Bank of
China – are likely to be less affected by the
new regulations.
“The theme of shadow banking has
been more of an issue for medium and
SMALL
SIZEDûBANKS vûSAIDû:HUûh4HEûBIGû
four have branches all over the country so
the smaller banks have to rely on market
funding and sometimes they invest in these
instruments.”
THOMAS BLOTT
Please send job moves to
[email protected]HNA Group looks to turn corner
HNA GROUP chairman Chen Feng has
EXPRESSEDûCONlDENCEûTHATû#HINASûAVIATION
TO
lNANCIALûSERVICESûCONGLOMERATEûWILLû
manage its cash crunch and continue to
receive support from banks and other
lNANCIALûINSTITUTIONSûTHISûYEAR
4HEûLIQUIDITYûPROBLEMûEXISTSûhBECAUSEû
we made a big number of mergers”, while
China’s economy “transitioned from
rapid to moderate growth”, impacting the
GROUPSûACCESSûTOûNEWûlNANCING û#HENûTOLDû
Reuters in a rare meeting.
“Rate hikes by the Federal Reserve and
DELEVERAGINGûINû#HINAûCAUSEDûAûLIQUIDITYû
shortage at the end of the year for many
Chinese enterprises,” he said. “We’re
CONlDENTûWELLûMOVEûPASTûTHESEûDIFlCULTIESû
and maintain sustained, healthy and stable
development.”
It was a rare acknowledgment by a
TOPûCOMPANYûOFlCIALûTHATû(.!ûISûFACINGû
lNANCINGûPROBLEMSû)NûRECENTûWEEKS û
local banks have privately and publicly
voiced concern after HNA failed to repay
some obligations, including aircraft lease
payments, and as surging debt drove up the
cost of the group’s short-term fundraising
to new highs.
(.!SûmAGSHIPû(AINANû!IRLINESû(OLDING û
Bohai Capital Holding, the parent of
AIRCRAFTûLEASINGûlRMû!VOLON ûANDû4IANJINû
Tianhai Investment, which controls US-
based computer distributor Ingram Micro
Electronics, each have suspended trading
pending major announcements.
Ingram Micro, which HNA bought for
roughly US$6bn, is part of the US$50bn
worth of transactions the conglomerate
announced over the last two years. They
also included big stakes in Hilton Hotels
Worldwide Holdings and Deutsche Bank.
HNA’s chief executive Adam Tan said
in November that the company was
selling some real estate and other assets to
IMPROVEûLIQUIDITYûANDûCOMPLYûWITHûNATIONALû
policy.
#HEN ûSPEAKINGûATûHISûOFlCEûINû(AIKOU û
southern China, where HNA Group has its
HEADQUARTERS ûSAIDûHEûWASûNOTûINVOLVEDûINû
decision-making for any transactions and
declined to comment on fundraising plans.
After years of “extraordinary development”,
Chen said that HNA was now focusedmore on integrating operations, creating
synergies between resources at home
and overseas and improving group
management.
“Our business has become so big that
WEûNEEDûTOûIMPROVEûEFlCIENCY vûSAIDû#HENû
“The long-term goal remains unchanged,
which is to become a world-class
enterprise,” he said. “2018 is our year of
effectiveness.”
HNA’s leverage has alarmed some
ANALYSTSûANDûITSûhAGGRESSIVEûlNANCINGû
policy” caused S&P in November to
downgrade its assessment of the company’s
creditworthiness. HNA in recent weeks also
HASûRAISEDûADDITIONALûlNANCINGûBYûSELLINGû
expensive short-term debt and pledging
more of its shares for loans.
Group borrowing, including bank loans
and bonds, surged by more than one-
THIRDûOVERûTHEûlRSTûûMONTHSûLASTûYEARûTOû
Rmb637.5bn (US$99.14bn), according to
Aû#HINAûBONDûMARKETûlLINGû'ROUPûASSETSû
reached Rmb1.2trn at the end of June,
ACCORDINGûTOûAûSEPARATEûBONDûMARKETûlLING
In December, HNA said it received
pledges of support for 2018 from eight big
domestic policy and commercial banks
including China Development Bank, Export
and Import Bank of China and Industrial
and Commercial Bank of China.
The company also said it still had
Rmb310bn in unused credit facilities from
lNANCIALûINSTITUTIONS
#HENûSAIDûTHATûlNANCIALûINSTITUTIONSû
continued to support HNA because of
THEûQUALITYûOFûITSûASSETSûANDûPROJECTSûh7Eû
provide local employment, tax revenue and
development,” he said.
Chen said that HNA still faces a problem
of experience, which has been tested by a
complex global environment. “Our young
leadership team, including myself, hasn’t
managed a global enterprise,” Chen said.
As challenges multiplied, Chen said
it was unreasonable to expect HNA to
“fully grasp” the situation at once. He said
DIGESTINGûTHEûGROUPSûACQUISITIONSûANDû
integrating operations would “take some
time.”
“So we’re doing it piece by piece,” Chen
said.
MATTHEW MILLERFollow IFR Asia @IFRAsia