|Bid||43.850 x 0|
|Ask||43.950 x 0|
|Day's Range||42.700 - 43.950|
|52 Week Range||29.800 - 43.950|
|Beta (5Y Monthly)||0.82|
|PE Ratio (TTM)||10.86|
|Forward Dividend & Yield||1.31 (3.06%)|
|Ex-Dividend Date||Jul 02, 2020|
|1y Target Est||36.34|
(Bloomberg Opinion) -- Last week, struggling with phone and internet banking services, I ventured out to my bank’s branch in the heart of Hong Kong’s financial district. Spread out over several floors of prime real estate, the big institution with its name sprinkled across the city was teeming with people – from two taking temperatures on entry to multiple assistants enquiring what they could help me with even before I reached the customer service counter. I got in the queue.My turn came. The counter agent couldn’t solve my problem. His colleague had no better luck. They then brought out their “digital ambassador.” She took me to a computer and got me to call the customer hotline. When that failed, they tried to get me to fill out a paper form and wait a few days. I lost it. I demanded to see the branch manager.Long story short, I walked out three hours later with the promise of a phone call and a resolution within the following two hours. I still couldn’t use my account, and had just spent hours — on top of the days wasted on the hotline. I was fuming.But I was also thinking, this just can’t be banking in 2020. Two of the agents were surely Millennials, and sympathized with my travails. There must be a better way. I’ve heard all the fuss around digital banks and fintech companies. Some are already worth a lot. Brazil’s Nubank (Nu Pagamentos SA) is valued at $10 billion, according to CBInsights, and its user base has surged 25% since the beginning of this year to 25 million. Singapore has shortlisted banks that would only exist virtually for operations in the city-state, while Hong Kong has already awarded eight digital banking licenses.Since my colleague Andy Mukherjee has written about this, I asked him for an update. Turns out, he’d just opened an account with one such new Hong Kong institution, WeLab Bank. What was that experience like?Andy: It took an hour from downloading the app to getting the account operational, and only because I’m such a technology dinosaur. “Raise phone camera to eye level,” and “Blink in three seconds, two, one...” I blinked too soon.Anjani: It’s tough to get that right, to be fair. But why did you plunge into the great unknown of virtual banking?Andy: That’s the question I’ve been asking myself. My main bank is the same as yours, and I don’t know the first thing about the parent WeLab Holdings Ltd., a startup that raised its Series C financing in December.Anjani: Welcome to the trend. WeBank, one of the first private digital banks approved for a license by China, is now one of the largest digital banks there, with 200 million retail users. That’s more customers than traditional lenders that boast big retail bases, like China Merchants Bank Co. and Ping An Bank Co.Andy: But then, WeBank has the backing of Tencent Holdings Ltd., while I had to look up WeLab founder Simon Loong on LinkedIn. While their newness doesn’t bother me, I do want to know if they can make money.Anjani: I get it — loss-making startups and unicorns are the norm, but a bank in the red doesn’t make me feel comfortable, either. Especially, if they’re making huge upfront investment in expensive things like certain secure technologies, more skilled people and all the promised innovation.Andy: The cost of opening accounts for digital banks is very low, and so are operational expenses because they aren’t sitting on brick-and-mortar outlets. They can make money provided they get the deposits to build sizable and safe loan books.Anjani: The safety issue is important. I know they’re regulated by the Hong Kong Monetary Authority just like conventional banks, and subject to stringent capital adequacy norms. The technology they use is vetted for robustness. And they need to submit exit plans, just in case things don’t work out. Andy: That was enough for me. It was a liberating feeling to trust at least a small sum to a bank other other HSBC Holdings Plc, Standard Chartered Plc and Bank of China (Hong Kong) Ltd. The three have a lock on deposits.Anjani: Maybe that explains why an international financial hub offers such terrible customer service, easily the worst I’ve experienced anywhere. It’s good that HKMA is making experimentation easy by saying that digital banks shouldn’t “impose any minimum account balance requirement or low-balance fees.” For the Millennial crowd, many on first jobs and such, that’s a draw.Andy: As a non-Millennial, I signed up because it was easy. When the app scanned my Hong Kong identification card and auto-filled nearly every field in the application, I couldn’t help but think of how the bulge-bracket bank you and I use made me visit a branch, and took all my paperwork, only to open my account in the wrong name. So much for KYC.Anjani: I can see the advantages of going branchless. Especially when nobody, including the staff, wants to sit in an enclosed space for hours during Covid-19. But if the digital bank saves money on customer acquisition, does it share it? Are you getting a good interest rate?Andy: I missed the inaugural 4.5% offer on Hong Kong dollar time deposits, and settled for a 0.9% annual rate that would rise to 1.1% if 50 people sign up. I was the 30th. As I used the app-generated link to invite 20 friends on WhatsApp, I understood why Sea Ltd., the maker of the popular mobile game, “Call of Duty,” is seeking a digital-only bank license in Singapore. Razer Inc., the firm behind the DeathAdder gaming mouse popular in the ESports community, also wants one.Anjani: Maybe that is the hook — the social element. The Generation Z banking customers, the oldest of whom are now 25, are digital natives, power users of social networks. They’ll be the trendsetters of consumer credit. Many will run their own businesses. Ant Bank (Hong Kong) wants to do digital trade finance for small and medium enterprises.Andy: Perhaps virtual banks will take us back to the future by recreating more cost-effective, better scalable versions of building societies, savings and loans associations and chit funds, hopefully with fewer blowups and scams.So bring on “Call of Duty,” DeathAdder, WeLab and others. Let’s have real some competition for our money.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of CMB International Capital Corporation Limited and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.
(Bloomberg Opinion) -- King dollar still reigns supreme. And that means there are two ways for banks to go: the U.S. way, or the highway.Hong Kong and Chinese officials scoffed when the Trump administration imposed sanctions last weekend on 11 individuals deemed to have played a role in undermining the city’s autonomy. Luo Huining, director of the central government’s Liaison Office, noted that he had no assets abroad and offered to “send $100 to Mr. Trump for him to freeze.” Chief Executive Carrie Lam said she wouldn’t be intimidated and derided the U.S. notice for getting her address wrong. The Hong Kong Monetary Authority gave banks in the city a pass, saying they had no obligation to follow U.S. sanctions under local law.The actions of lenders tell a different story. China’s largest state-run banks in Hong Kong are taking tentative steps to comply with the sanctions, Bloomberg News reported Wednesday, citing people familiar with the matter. Major lenders with operations in the U.S. including Bank of China Ltd., China Construction Bank Corp. and China Merchants Bank Co. have turned cautious on opening new accounts for the sanctioned officials, and at least one has suspended such activity.It’s another demonstration of the realpolitik of the dollar system and the financial power that comes with being the issuer of the world’s dominant reserve currency. China’s state-controlled lenders would be the last to willingly follow a directive condemned as “clowning actions” and “shameless and despicable” by the Chinese and Hong Kong governments. HSBC Holdings Plc, Standard Chartered Plc, Citigroup Inc. and other lenders with operations in Hong Kong and ambitions in China will look on with relief. Squeezed between the conflicting demands of Hong Kong’s national security law and U.S. sanctions, they have been given political cover.For banks with international operations, the threat of having their access to dollar funding and overseas networks curtailed cannot be countenanced. Just look at how the U.S. has been able to impose its will via sanctions on Iran, despite resistance from Europe.Dealing in currencies other than the dollar provides little cover, as China’s Bank of Kunlun Co. found out. The country’s main lender for processing Iran-China payments, Kunlun was sanctioned by the U.S. Treasury Department in 2012. The bank responded by starting to handle payments from Iran in yuan and euro instead, yet halted even these in 2018 under sanctions pressure, according to Reuters.It’s little wonder that China wants to challenge the dollar’s global dominance. While officials have spoken frequently of their ambition to give the yuan a bigger role, there’s little sign of progress. The dollar’s share of international payments rose in the past year, while the proportion of payments in yuan remains negligible, according to data from the Brussels-based Society for Worldwide Interbank Financial Telecommunication, or Swift.As my colleague Andy Mukherjee and I have argued, banks are cogs in a giant financial machine that Washington keeps aligned with its foreign policy goals. Take the case of Huawei Technologies Co.’s finance chief Meng Wanzhou. The daughter of Huawei’s founder is currently battling extradition from Canada to the U.S. on charges that she misled HSBC into clearing transactions that potentially violated Iran sanctions. Lawyers for Meng, who has denied the charges, have argued HSBC could have avoided making the payments through the U.S. HSBC routed the money through New York’s Clearing House Interbank Payments System, or Chips, which handles 95% of all dollar transactions, or $1.6 trillion a day.While it’s technically feasible to clear payments in the much smaller offshore dollar market in Hong Kong, when money crosses borders it is accompanied by instructions transmitted by Swift. Since the September 2001 terrorist attacks, the U.S. has watched over financial flows through the organization. In practice, it would have been almost impossible for money destined for Iran to avoid scrutiny.The message ringing from China’s banks is louder and clearer than the contrary protestations of the country’s officials. Like it or not, it’s still a dollar world. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.