Margin Call on Overleveraged China

Written by Zennon Kapron || January 28 2015

The explosion in margin lending has fueled a baseless rally in the Shanghai Composite, but the magnitude of leverage in the stock market is still coming to light.

Based on a note from the People's Bank of China, China's personal credit scores may very soon be coming from the tech giants rather than any financial institution or credit data provider. On January 5th, the People's Bank of China (PBOC) sent out a note to eight non-banking institutions that they should "prepare for personal credit information operations" within 6 months. Although the note is a bit vague, the effort could indicate the end of what has been a continual problem with personal finance in China.

China's P2P problems part of larger shadow banking squeeze

Written by Denis Suslov || January 08 2015

According to data from Online Lending House, a China P2P industry data provider, as many as 92 P2P websites had issues in December 2014, significantly more than the 76 that had trouble in all of 2013, Some websites went offline temporarily, some products turned out to be fraudulent and some businesses were closed outright.

It's official. Although the bank has already technically been approved (several times), it seems like WeBank, 30% owned by Tencent, will finally make its big splash on January 18th.

The Shanghai Free Trade Zone (FTZ) expands. A lot.

Written by Zennon Kapron || January 06 2015

Sneaking it in while the west was busy sipping eggnog and taking a break, the Chinese government has big plans for expanding the Shanghai Free Trade zone geographically. The new zone will include some of the most important real estate in Shanghai including the Lujiazui Financial disctrict.

Tencent's Webank approved for operation

Written by Kapronasia || December 13 2014

On December 12th, Webank, the proposed bank from Tencent received regulatory approval to start operations. 

Kapronasia is pleased to release our P2P Lending in China report. Based on primary and secondary Comprehensive peer to peer lending reportresearch, the report is one of the most comprehensive reports on the development of Peer to Peer lending in China.

For more information on the report click here. 

PBOC drafts outline for long-awaited deposit insurance scheme

Written by Jan Jetter || December 04 2014

The PBOC has announced it will be introducing a deposit insurance system in China, which will have a profound impact on banks’  behaviour.  Liberalizing the banking sector may put it on a more sustainable path but short-term risks should not be ignored.

Chinese P2P lending risks continue to rise

Written by Jan Jetter || November 18 2014

October has been a tough month for China's P2P lending platforms as more and more are pressured to shut down due to capital shortages and fraudulent behaviour.

The Next Big Thing: China's Digital Banking

Written by Jan Jetter || November 11 2014

The digital revolution has finally caught up with the Chinese banking sector. As it undergoes important reforms, industry leaders are faced with numerous challenges and must innovate to stay on top of their game.

Like a piece of delicious cake, all good things come to an end and after robust growth since the launch, Yuebao has seen the first decline in 2014Q3. According to the data from financial news website East Money, although Yuebao has achieved 5.69 Billion in net profits, Yuebao AUM has declined 6.84% for the first time, reaching RMB 534.89 Billion. Is this part of a larger trend?

After over a year of incredible growth, Yuebao is starting to slow slightly and the expected returns on the platform are dropping down to about 4%, not entirely different than what is possible in a bank. In April 2014, Alibaba made a decision to roll out a new online finance product, a bankers' acceptance online lending.

Last week, Alibaba’s finance arm rebranded their “Small and Medium Financial Services Company today to “Ant Financial Services Group” or “Ant Financial”.

Payment Providers Face an Uphill Battle with Banks

Written by Denis Suslov || October 13 2014

Mr. Li Xiaofeng, head of PBoC Financial IC Card Panel, believes that Chinese payment providers will not play a major role in payments in China's financial industry. “From the scale and channel perspective, Central Bank and commercial banks remain the main payment providers.”

Alibaba about to move forward on private bank in China

Written by Zennon Kapron || October 02 2014

Although Alibaba was in the first round of initial approvals to setup a private bank in China earlier this year, it was only at the end of September 2014 that they finally received approval to move forward on the project along with Juneyao, another large Chinese company who is also looking to setup their own bank.

With the Alibaba IPO behind us, what about Yue bao's future?

Written by Jan Jetter || September 24 2014

In the wake of the largest IPO in the U.S., there has been increased attention on China's innovation and its potential disruptive nature on global banking and e-commerce. Yue bao's future strategy is in the spotlight once again.

What does tokenization mean for China?

Written by Denis Suslov || September 22 2014

Tokenization seems have become a buzzword since the Apple Pay announcement. However, the technology itself is not new.

China's online banking and mobile banking continue to be the key channels for customers who interact with their banks through 'e-channels' as data from iResearch, a Chinese online customer survey service provider, shows.

According to Online Lending House, an internet finance news source, P2P transaction volume has reached RMB 81.84 Billion in 1H2014. The most active regions are Guangdong, Zhejiang, Shanghai, Beijing and Jiangsu.

Direct Banking model Favored by City Commercial Banks

Written by Fiona Zhao || August 26 2014

Earlier this year, we published our 2014 “Top-10 China Banking Industry Trends” report and predicted the advent of direct banks. We were right: in a month Minsheng Bank rolls out its Chinese direct banking institution.

On July 25th, Shang Fulin, the chairman of CBRC, disclosed three private banks that had been approved by the CBRC. Hua Rui Bank, planned to be set up by Fosun and Juneyao, was not on the list. Later the Shanghai branch of CBRC revealed that the Fosun and Juneyao partnership had broken up.

Kapronasia's new report entitle "China Moving Abroad - A look at the legal...and not so legal ways Chinese nationals are moving their money abroad" is now available for download on Kapronasia.com. To view and download the report, please go to our research section here.

Alibaba Teams up with Banks to Launch Unsecured Loans

Written by Fiona Zhao || August 12 2014

On July 22nd, 2014, Alibaba teamed up with seven banks including ICBC, CCB, CMB, Ping An Bank, Postal Savings Bank of China, Bank of Shanghai and Industrial Bank to roll out new internet business loan service.

Will VTMs disrupt the ATM industry in China?

Written by Fiona Zhao || August 08 2014

China has been going through rapid urbanization during last decades and in the past ten years alone the percentage of population residing in cities has leapt from 40.5% in 2003 to 53.75% in 2013.

The “Notice on Government-set Prices and Government-Guided Prices for Commercial Banking Services”, published by National Development and Reform Commission (NDRC) and China Banking Regulatory Commission (CBRC), is effective on August 1st, 2014.

Private Banks and China now liberalizing - New opportunities?

Written by Diego Castillo || August 06 2014

China is beginning to open its financial sector with the approval of three privately owned banks, extending the wave of financial reforms aimed at boosting China's changing economy.

Talks China – US - July 2014

Written by Diego Castillo || July 24 2014

Earlier this month, the US and China held their annual talks in Beijing, where they discussed trade, economic, regional, and political concerns.

Kapronasia's ATMs in China 2014 webinar and slides are now available in the webinar section of the website or by clicking here

Chinese Banking Technology: Brilliance Technology Lists

Written by Denis Suslov || July 16 2014

Currently there are 637 companies on the IPO list in China and their prospectuses, published by the China Securities Regulatory Commission, reveal business intelligence, previously not available for public.

Foreign Banks in China: Steady Growth

Written by Denis Suslov || July 11 2014

PBoC’s 2013 annual report shows that foreign banks in China showed steady growth and even outpaced GDP growth in terms of new deposits, but still lag their domestic competitiors.

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