10 times 10-year analysis of asset growth, are the Asia-Pacific region such as the growing number of asset acquisitions. is not unfounded. we all know, Asia and other emerging markets more dependent on bank financing structure, anti-economic fluctuations, limited capacity, and global trade patterns is that economic crises for regional infiltration. Therefore, it is likely all losses. record high growth, it is also a good hedge the business risk.
rainy day into a mature market for investment allocation, or waiting for their low volatility period, arbitrage; then, arbitrage gains further support expansion of emerging markets, mergers and acquisitions.
global bank's balance sheet structure Tip us: perhaps, the future of China's best banks, asset allocation will also need to be balanced global bank. Therefore, the banks forget it right. Why? read down to know hh
money, buy to
Chinese banks are to usher in the concentration areas in emerging markets around the configuration, or to increase their risk of fluctuations in
2006, the Chinese banking industry has entered the era of high valuations. the talk of the media on 23 March .2007, ICBC's market value reached 1.7202 trillion yuan to 1 U.S. dollar at 7.74 yuan's exchange rate, the market value of the equivalent of 222.2 billion U.S. dollars (Table 1). to know In 2006, all banks in the United States (including foreign banks and financial services group) were 868, the average market capitalization of 31 billion U.S. dollars, and the median was only 1.5 billion U.S. dollars, ranking the top 10% of the average market value of banks about 36 billion U.S. dollars. As of March 23, 2007, A-share listed banks average 4.45 times book value: Industrial and Commercial Bank 4.6 times book value, Minsheng Bank is as high as 6.13 times book value, Shenzhen Development Bank is also 5.8 times, respectively, significantly higher than the international interbank valuation. and foreign banks in 2005, the average is only 2.7 times book value also, and in other emerging markets bank valuation of only 3.3 times the average. valuations rise, the high valuation of M & A activity is the recognition of China's economic growth, Chinese banks is also a kind of rapid expansion is expected.
2001, the Chinese banks bad debts up to 25% (and companies), the face of this problem, China's banking sector has taken additional capital market and allow foreign equity participation in order to study a series of advanced risk management system reform. After a few years, asset management companies with bad assets stripping and injection of the central government, four Large state-owned commercial banks have a debt ratio decreased significantly: In 2006, ICBC's bad debt rate to 4.1%, Bank of China dropped 4.2%, 3.5% of China Construction Bank, Agricultural Bank is only one of the bad debt rate is still as high as 24% . on the expected high growth of Chinese banks, which in turn enhances the potential for the expansion of Chinese banks. to the aforementioned figures, the Industrial and Commercial Bank only spend 10% of the shares to be ranked in the top 10 M & 6% of the U.S. listed banks; in the emerging markets of the 86 commercial banks, top 10% of the banking market value of about 20 billion U.S. dollars, Industrial and Commercial Bank equivalent to only 1% of the total market value. This is the March 23, 2007 $ 1 against 7.74 yuan's exchange rate. If we consider the potential appreciation of the renminbi, the Chinese banks will be the actual cost of overseas mergers and acquisitions mm lower U.S. dollar against the RMB exchange rate if the breakthrough 7, the Chinese banks the cost of overseas M & Save 10 Qiangzai % or more.
Currently, four state-owned commercial banks, Bank of Communications, China Merchants Bank, CITIC Group, to establish a branch in Hong Kong, or are wholly owned subsidiaries. such as the Industrial and Commercial Bank unit of ICBC Asia, Bank of China subsidiary BOC Hong Kong, BOC International, and China Construction Bank's Hong Kong, Sino Gold .2006 years later, the mainland Chinese banks in Hong Kong, more active M & A activity in early .2006, Construction Bank had purchased with Hong Kong in Asian banks, although the final Bank of Asia is Malaysia's Public Bank for 4.5 billion Hong Kong dollar to go higher price, this is the trend of bank mergers and acquisitions outside the start.
2006 年 12 18, Bank of China to 965 million cash acquisition of Singapore Aircraft Leasing Corporation 100% issued share capital of .2006 December 29, the formal completion of the Construction Bank Bank of America (Asia) 100% equity interest in the acquisition, the acquisition of the total amount of close to 100 million. After the acquisition, construction, banking operations in Hong Kong to the original scale twice, first from the original loans soared to 16 9 .2006 December 30, ICBC and Bank Halim Indonesia, signed the shareholders of the acquisition agreement to acquire 90% stake in Bank Halim; another 10% of the shares 3 years later by the Industrial and Commercial Bank of selective acquisitions. The bank is currently $ 50,000,000 total assets .2007, Minsheng Bank also planned Hong Kong listing, intended to raise funds to purchase a subsidiary of ICBC in Hong Kong International Trade and Industry. h < br> Chinese banks are going out, and seems right out of the first step to the choice of Hong Kong, followed by our close to Southeast Asia, the reason is very simple, homologous to the cultural and economic effects of synergy. Asia and other emerging market assets configuration risk capital injection market, the crisis seems to lift the bad loans, but the future of China's banking sector will face more new challenges.
from the see: today's world, globalization of trade patterns to the regional economic crisis has the characteristics of penetration, mergers and acquisitions in China and other neighboring regions of Hong Kong banks, hedge not only can not play the role of economic volatility, the risk may also increase the region resonance. Malaysia from 7.3% to -7.4%, the Philippines, from 5.2% to -0.6%, Singapore from 8.3% to -1.4%, Thailand 5.9% in 1996 down to -1.4% in 1997 and further dropped to 1998 -10.5%. and emerging markets bank-dominated financial system and government subsidies under the control of position risk exposure, but also led to the banking system is highly sensitive to economic cycles, GDP will decline a few percentage points a heavy banking sector blow. the financial crisis, Indonesia's bad and doubtful debts increased from 3% before the crisis rose to 50%, Thailand's bad debt rate from 13% in 1996 rising to 43% in 1998, and even the South Korean economy is relatively stable, bad debt rate was close to 20%, other Southeast Asian countries, most of the bad debt rate of 10% or more. can be seen that the regional economy is highly linked effects (Figure 1).
According to World Bank data, the region and Most of the Chinese economy in the correlation coefficient between 0.5-0.7 times significantly higher than in mature markets such as Europe and the United States; even in Argentina, Brazil and other South American countries, due to the same economic model of developing countries, most of them also has a similar cycle with the Chinese economy (Figure 2).
too concentrated in the emerging markets asset allocation, risk diversification will not play an effective role in regional portfolio. Not only that, the South East Asia and Latin America and other countries or regions generally greater than the volatility of China, Therefore, the results of the allocation of resources may also lead to increased risk.
Risk Management: ism does not work under the policies to protect the four major banks, has not experienced the real market test. In addition to macroeconomic volatility in emerging markets outside the , and the transformation of the whole financial system risks: financial liberalization, including the impact of foreign capital, industry and the separation of mixed uncertainty of the regulatory environment, capital market financing system directly to the banking system of indirect financing of alternative threats, and new business experience the lack of such data.
the long term, the bank's competitiveness comes from the risk identification and management. Well, really the introduction of foreign regulators and operators to achieve the original intention of it? August 2006, data published by China Banking Regulatory Commission Display: foreign banks in China more than 20% bad debt ratio of 24, with more than 90% have 7. as Bank of Montreal said the head of Shanghai Representative Office, risk, foreign banks will also face. From mode. Therefore, looking forward to foreign equity participation to enhance risk control, Chinese banks may only be wishful thinking. In view of this, in order to reduce the risk of cyclical fluctuations in the Chinese economy and the reform of the financial system against the risk of trial and error, in addition to improving their own risk management system, Chinese banks should be a more effective way to what is it?
from Asia to the world, an increase of 10 times 10 to see ambush of good investment to the market fluctuations in the low discount merger arbitrage. This is the emerging markets bank, with its valuation advantage can also use the regional economic cycles are not synchronized, the expansion of globalization and the spread
risk portfolio was established in 1865, HSBC Bank (Its name Hongkong and Shanghang BankingCorporation, is a commitment to the Chinese mainland and Hong Kong markets, and radiation around the Asia-Pacific banks. the last century, 50 years, merchant banks and the Middle East, the Bank of England, set up a ; out of Asia, through the acquisition of Marine Midland Banks into the U.S. market, and then through a series of acquisitions to become the seventh largest bank in Canada In 1991, the establishment of HSBC Group, will move its headquarters from Hong Kong, the United Kingdom In 1992, the acquisition of Britain's major banks A Midland Bank.1996, through the acquisition of Brazilian banks to enter the Latin American market, in 1997, the acquisition of Argentina's sixth largest bank; December 1999, the acquisition of the former fifth largest bank in the United States, one of the Liberty Bank of .2000, the acquisition of French Seven bank CCF; 2002, the acquisition of Mexico's fourth-largest bank; the same year, Ping An Insurance bought a 10% stake in China in 2004 to further increase to 20%, becoming the second largest shareholder; 2003, the acquisition of Household International Inc U.S. ., reconstituted as the HSBC Finance Corporation; the same year, the acquisition of Mexico's largest consumer finance bank; 2004 acquisition of Britain's Marks and Spencer Money; the same year, also bought 20% stake in Bank of China; the same time, its purchase of the Industrial Bank, Hang Seng Bank 16% of the equity; December 2005, HSBC Finance Corporation acquired Metris Companies Inc., to become the nation's fifth-largest card issuer Visa and Master Card.
today, Bank. At present, the in Mexico), South America 1900. global strategy to form a global portfolio, 40% in Europe; and 50% of profits come from emerging markets, 20% from North America, 30% from Europe (Figure 3,4).
growth Tip: arbitrage periodic underestimated
In the , is underestimated from the mature market arbitrage.
as UK financial system that the country of origin of a modern financial system of the core. Then, as a Hong Kong Centre, emerging markets in Asia Pacific grew up on the bank, > The answer is: the use of the global economy arising from the economic cycle is not synchronized between the valuation, arbitrage underestimated.
globalization is , the company carried out in mature markets, ; HSBC years, major UK clearing bank Midland, holds 14.9% stake.
The 16% stake in Bank. Western countries into a temporary economic recession, banks and other financial institutions hit. British Midland, one of the major clearing banks in the huge loss of 177 million pounds in 1990, although the reduced losses and 81% the following year, but the book still amounted to 33 million pounds loss banks into capital shortages. and the Western countries depression is different from the early 90s last century, the Asia-Pacific emerging markets are enjoying high growth, joy, and its growth potential that many international investors salivating. In this context, 1992 July, billion pounds, the initial investment to pay 550 million pounds in cash. After the acquisition of Midland, European and American markets began .1999-2000, the European economy into a stagnation period (Fig. 5), size of the bank, CCF lack of fast-growing capital. to overcome the bottlenecks of growth in Europe, CCF have tried in Egypt, Brazil and other emerging markets to expand their business, but the disadvantage that it can not scale fast enough to build a diversified business portfolio, and thus can not effectively resist the cyclical nature of the local risk. therefore, CCF has been working to find a way to provide a broader space for development and support of the banks more capital. In addition to the number of European banks offered an olive branch to the CCF, but in the end for the CCF The bank has risen to fourth place ranking. In the layout of the European market, GDP real growth rate after inflation is negative, although a slight improvement in 1996, but GDP growth rate is still only 2.4%. In this context, 1996-1997, region's first federal savings and loan associations. Meanwhile, ; and one of the nation's top 5 largest banks in the WellsFargo joint venture transaction line to become the largest Western trading lines; then with the the late 90s, a continuous occurrence of financial crises in emerging markets, for the fortune in Hong Kong U.S. Bank is one of Liberty. In 1994 suffered a series of ; HSBC times, all in cash, for America's No. 2 consumer finance bank HI acquisition. HI was the area of consumer finance in the United States ranked second only to the suffering for the time being the threat of rising bad debt rate, by the end of September 2002 6 months past due bad debt ratio has risen to 4.8%, which is for a Bank of America is a very dangerous signal. proposed 14.8 billion takeover offer, of which 134 billion to 1.5 times book value, re-evaluation of assets shrunk by half.) Figure 5 and Figure 6 is easy to see, recovery period, when local banks not to recover from huge losses, some banks even on the verge of bankruptcy, can not wait for economic recovery. In this time, the The noble more fully. cyclical volatility in emerging markets more violent, low discount more lucrative arbitrage (Figure 7) In 1995, While inflation was a big clean up the banking sector, foreign banks took the opportunity to buy In 1996, Brazil has the 7th largest insurance companies and 5 of the largest fund management company .1997, market position in Argentina, acquired eight offices and increased its investment in insurance and annuity business. In 2002, of the crisis .2001 credit card business, .2001 Insurance Fund took over in July, large gains, and to promote the rapid expansion of its worldwide In 2003, But in fact periodic crises into the HI, its a lot of bad debt provision has been made a lot of company's assets shrunk .2002, $ 5,180,000,000. But, however, these are the bad debt provision as the U.S. economic recovery has been partially reversed .2004, areas the proportion of the total loan amount from the previous year also fell 2.9% to 1.7%. taking into account the expansion of the size of loans, in fact,
low M & A activities, Total operating profit gained 13.4% of the average annual growth rate of mature markets in Europe also gained on the growth rate of 12.1%, far higher than the localization of other European banks. Even the UK's biggest banks Barclays, over the past 10 years average annual growth rate of operating profit is only 9.75%; France's largest bank the have more, which makes into a low, desperate need of new capital to enter, a group of European and American financial institutions to take the opportunity to large-scale presence. which Newbridge low of 5 million U.S. dollars from the South Korean government bought Korea First Bank 51% of the shares, then the whole Bank of value less than 9 billion, while losses on up to 10 billion U.S. dollars. but 5 years later, with some of South Korea's economic recovery and the reversal of bad debts, Korea First Bank has significantly improved the performance of 10 January .2005 Japan, Korea First Bank, Newbridge Group to sell 3.25 billion in the price of Standard Chartered Bank, 5 years, earned 24 billion U.S. dollars. In addition, the German commercial banks in Korea Exchange Bank for 249 million investment, most of from the previous conversion from the Bank loan to the 27.79% stake in Korea Exchange Bank to become the second largest shareholder.
2006, the State contribution to profit before tax for the first time exceed 10 billion U.S. dollars. Figure 8 as : first in the growth potential of the region regional groupings
global strategy for the the output of good management, br>
decentralized system of risk management as a highly globalized banks, , asking them to its various branches have set up their own risk monitoring system, while the headquarters is only responsible for the high-level credit policies. that is, in business, industry, geographical position between the exposure to credit risk and capital allocation of asset allocation, Then by the subsidiary under the Headquarters of the strategic plan and position a ; in bad debt rate of around mainly by the local impact of the macroeconomic situation. In the region in the 2002 financial crisis, , as a whole, bad checks similar to the most stringent of Swiss bank (the last 5 years, the Swiss banking sector is also bad debt rate of around 3% average). decentralized model, HSBC r l as half of the proceeds from the stable, mature economy, half from the fast-growing but more volatile emerging markets, which are ...
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