ASEAN region at Citigroup.
Similar trading schemes exist between
the Hong Kong stock exchange and those of
Shanghai and Shenzhen.
According to Hong Kong Exchanges and
Clearing, total northbound trading volumes
in 2017 hit Rmb2.27bn (US$361m), a 194%
year-on-year increase, while southbound
turnover grew 170% year on year to
(+BNû53M
Under both Stock Connect schemes,
HKEx’s subsidiary, Hong Kong Securities
Clearing Company, and its mainland
equivalent, China Securities Depository
and Clearing Corporation, entered into an
agreement, whereby the former provided
settlement services for northbound trades
and the latter for southbound ones.
THOMAS BLOTT
Bankers were more circumspect,
however, about whether the exchange
should allow issuers to price above the
range.
“If you put yourself in a retail investor’s
shoes, you may be investing on margin,”
said one ECM banker. “If a deal has priced
above the top end of the range, the investor
WILLûRUNûINTOûDIFlCULTIESû)ûCANûUNDERSTANDû
why the exchange wants to be protective of
them given their importance in the Hong
Kong IPO market.”
SEHK issued another guidance letter on
IPO allocations on February 2, again aimed
at shoring up protection for investors.
Under current rules, when the retail
TRANCHEûISûATûLEASTûûTIMESûOVERSUBSCRIBED û
shares are automatically reallocated
to retail investors under the clawback
mechanism.
The new guidelines state that when
the the placement tranche of an IPO is
undersubscribed, or fully subscribed but
THEûRETAILûTRANCHEûISûLESSûTHANûûTIMESû
oversubscribed, issuers can only reallocate
shares from the placement tranche to the
retail portion of not more than double the
initial allocation to the retail tranche or not
more than 30% of the total offered shares.
“The placing tranche reallocation
guidance letter aims to better protect
investors who subscribe for shares under
the public subscription tranche by limiting
how such investors are allocated shares
which are not taken up by institutional
and professional investors for whatever
reasons,” said David Graham, HKEx’s chief
REGULATORYûOFlCERûANDûHEADûOFûLISTING
THOMAS BLOTT
International Financing Review Asia February 10 2018 13
Please send job moves to
[email protected]CBA expects
A$375m money-
laundering fine
COMMONWEALTH BANK OF AUSTRALIA expects to
BEûlNEDûAROUNDû!Mû53M ûFORû
money laundering after a probe which has
cast a shadow over the major lender in recent
months.
CBA booked the provision in its results for
THEûlRSTûHALFûOFûITSûlNANCIALûYEAR
“The group believes this to be a reliable
estimate of the level of penalty that a
court may impose. This takes into account
currently available information including
legal advice received by the group in relation
to Austrac’s claims,” the bank said in a
statement.
CBA was referring to the proceedings
!USTRALIANûlNANCIALûCRIMEûAGENCYû!USTRACûlaunched in federal court last year for alleged
breaches of anti-money laundering and
COUNTER
TERRORISMûlNANCINGûLEGISLATION
!USTRACûALLEGESûTHAT ûFROMûûUNTILû û
CBA oversaw tens of thousands of illicit
transfers, amounting to A$624.7m, including
some involving known criminal gangs.
CBA has blamed a coding error for most of
the alleged breaches, although it is contesting
some of the other charges.
Each breach carries a maximum penalty of
!M ûLEAVINGûTHEûBANKûTHEORETICALLYûFACINGû
AûlNEûOFûALMOSTûAûTRILLIONû!USTRALIANûDOLLARS
However, most analysts had expected a
lNEûOFûAROUNDû!M
4HEûSCANDALûTRIGGEREDûAûmOODûOFû
resignations, including that of CEO Ian
Narev, the scrapping of bonuses for senior
executives, and laid the groundwork for a
Royal Commission to look at the conduct of
lNANCIALûSERVICESûlRMS
CBA also booked expenses of a further
A$200m related to regulatory and compliance
costs, which includes outlays related to the
Royal Commission.
4HEûCOMBINEDû!MûCHARGEûWASûAûDRAGûon CBA’s results. The bank reported a fall in
lRST
HALFûCASHûPROlTûFORûTHEûlRSTûTIMEûINûNINEû
years.
)TSûCASHûPROlTûFELLûûTOû!BNûFORûTHEû
six months to end-December, as opposed to
ANûANTICIPATEDûûRISEûINûPROlT ûACCORDINGûTOû
seven analysts Reuters polled.REVENUE GROWTH
Its underlying results were strong as
OPERATINGûINCOMEûROSEûûTOû!BNûONû
the back of higher net interest income, in
particular.
Net interest income was up 6% to
!BN ûWHICHûTHEûBANKûATTRIBUTEDûTOûAû
mixture of loan growth and an increase in its
deposit base.
Its institutional bank continued to struggle
WITHûCASHûPROlTûDOWNûûTOû!M û
mostly because a lack of volatility hurt its
markets business.
The bank’s common equity Tier 1 ratio
stood at 10.4%, just a fraction short of the
ûTARGETûTHEû!USTRALIANû0RUDENTIALû
Regulation Authority has set for the big four
banks by 2020.
CBA cautioned, however, that its CET
ratio would fall from July 1 onwards as
it adopted the new AASB 9 accounting
standards, which would raise provisions.
Rival NATIONAL AUSTRALIA BANK last Thursday
REPORTEDûAûûRISEûINûlRST
QUARTERûCASHûPROlT û
driven by the lowest quarterly bad debt
charge in two years.
Australia’s fourth-biggest bank by market
value posted unaudited cash earnings of
!BNûFORûTHEûTHREEûMONTHSûENDEDû
December 31.
The quarterly result was boosted by a
23% decrease in bad and doubtful debts to
A$160m, representing the lowest bad debt
charge since the quarter ended December
Its CET1 ratio rose slightly to 10.2% at the
end of December versus 10.1% at the end of
September.
WESTPAC BANKING CORPORATION said last
Monday its stressed assets fell in the three
months to December 31, down 2bp quarter
on quarter to 1.03%.
)TûALSOûANNOUNCEDûPLANSûTOûRAISEû!Mû
in capital through the launch of new hybrid
securities.
The bank’s Tier 1 capital ratio was 10.1% at
the end of December, lower than the 10.6%
reported at the end of September.
7ESTPACûDOESûNOTûDISCLOSEûPROlTûORûREVENUEû
numbers in its quarterly trading updates.
Australia and New Zealand Banking
Group said earlier this month it would stop
reporting quarterly earnings.
THOMAS BLOTT“The group believes this to be
a reliable estimate of the level
of penalty that a court may
impose. This takes into account
currently available information
including legal advice received
by the group in relation to
Austrac’s claims.”