作者： bankr

China’s central bank may be re-pegging the yuan’s exchange rate against the US dollar to avert the threat of a financial crisis and create a sense of stability amid the huge economic and financial uncertainties resulting from the coronavirus pandemic, according to analysts.
While the central bank has never publicly admitted that it would peg the yuan to the US dollar, in the current economic and financial environment, Chen Yulu, a deputy governor at the PBOC, said late last month that the yuan would fluctuate around the level of 7 yuan “in the future”.
Such a move would mirror the strategy Beijing adopted a decade ago given heightened uncertainty in the aftermath of the global financial crisis. The People’s Bank of China (PBOC), the nation’s central bank, effectively held the US dollar-yuan exchange rate at 6.83 from late 2008 until June 2010.
Analysts said that Chen’s comments signalled Beijing’s reluctance to weaken the yuan substantially despite economic challenges, and pointed to the central bank considering the adoption of a de facto peg in the yuan exchange rate.
“PBOC leaders have hinted they may be targeting seven,” said Cliff Tan, East Asian head of global markets research at MUFG Bank. “Although we are not sure how a stronger currency helps in a post-Covid-19 adjustment”.
Analysts said the phase one trade deal signed with the United States in January also included an exchange rate provision that prohibits competitive currency depreciation.

“Since the environment has turned into quite an emergency now, [the PBOC] is using moral suasion to boost confidence and anchor expectations for the currency,” said DBS Bank economist Nathan Chow. “There can be no sharp and rapid depreciation in the yuan now since that would make matters worse.
“Once you start pegging the currency, fund managers and traders will continue to speculate when you will do it again the next time. This would reverse previous reforms to make the yuan [exchange rate] more market driven.”
The yuan plummetted to 7.16 against the US dollar in mid-March, its weakest level in five months, amid a crash in global stock markets as investors scrambled for the perceived safety of US dollar assets. But the Chinese currency has stabilised in the past week or so and traded at 7.07 on Thursday.

Myanmar has granted operating licences to seven Asian banks, bringing to 20 the number of foreign banks allowed to do business in the previously isolated market.

Bank of China (Hong Kong), Taiwan’s Cathay United Bank and Mega International Commercial Bank, Industrial Bank of Korea, Seoul-based KB Koomin Bank, Korea Development Bank and Siam Commercial Bank of Thailand were granted preliminary licences, the central bank’s licensing committee said in a statement on Friday (April 9).

The approval gives the lenders nine months to demonstrate they can fulfill business plans laid out in their application to the authorities before they will be given proper licences, the statement said.

This licensing round was opened last November with hopes of drawing foreign investments at a time the government was under pressure to speed up economic reforms before the parliamentary elections expected later this year.

A branch licence allows a range of wholesale banking activities, while a subsidiary licence allows both wholesale and, from January 2021, onshore retail banking services. A branch licence and subsidiary licence require a minimum paid-in capital of US$75 million and $100 million respectively.

The Myanmar Times understands that more than 10 foreign banks, including Taiwan’s First Commercial Bank and China Trust Banking Corp, Korea’s KEB Hana, Kasikorn Bank and Krungthai Bank of Thailand, and Commercial Bank of Ceylon, had been considering applying for preliminary licences. The central bank did not say how many had submitted applications.

The seven licences were the first granted since Daw Aung San Suu Kyi’s National League for Democracy party formed a government in 2016.

There were two licensing rounds under U Thein Sein’s government. The first in 2014 saw nine banks awarded, and the 2016 round granted licences to four Asian banks.

In total, there are 13 non-Myanmar lenders currently allowed to operate in a limited capacity. Another 51 banks and finance companies have representative offices, while there are 27 local banks. Banking services are still severely limited in the country and are dominated by financial institutions with ties to the former military regime.

The uncertainty around the global coronavirus pandemic’s duration and severity creates “major downside risks” to the US economy, the Federal Reserve said Wednesday.

The United States is sure to take a hit in the near term as businesses are forced to close and consumers are confined to their homes, the Fed said in the minutes of the March 15 emergency policy meeting, when the central bank slashed the benchmark interest rate to zero.

But while the shutdowns imposed to contain the virus create hardship for businesses and households, they should not have the lasting impact that was seen in the wake of the global financial crisis in 2008, Fed officials said.

Though central bankers worried that the containment efforts would spread to other areas of the country and have a ripple effect on the economy, the meeting was held before the most stringent lockdowns were imposed in most states.

In the final two weeks of March, nearly 10 million people filed for unemployment benefits, and economists expect the jobless rate to hit double digits this month.

But at the time of that emergency meeting – the second unscheduled meeting last month, which was held on a Sunday – officials said, “The unpredictable effects of the coronavirus outbreak were a source of major downside risks to the economic outlook.”

When growth will resume depends “on the containment measures put in place, as well as the success of those measures, and on the responses of other policies, including fiscal policy.”

Since then, Congress has approved three support packages, including a massive US$2.2 trillion rescue measure that puts money into unemployment insurance and emergency lending for small businesses to pay workers.

Despite the severity of the current crisis, members of the Fed’s policy-setting Federal Open Market Committee said the US economy and banking system were on solid footing.

Some officials viewed the pandemic as “not directly comparable with the previous decade’s financial crisis and it need not be followed by negative effects on economic activity as long-lasting as those associated with that crisis.”

Some committee members were reluctant to cut the interest rate by a full point less than two weeks after lowering it a half point, concerned in part about the negative signal that would send about the economic outlook.

But the majority favored a “forceful” response, including the measures the Fed has taken to pump huge amounts of liquidity into the US financial system, to help support businesses facing cash shortages.

They worried about low-income households with “less of a savings buffer” making them “more vulnerable to a downturn in the economy.”

As stay-at-home orders to battle the coronavirus are effective in most states, the virus-related restrictions have already shed 29 percent of US daily output, Moody’s Analytics warns as cited by the Wall Street Journal.

The full scale of economic disaster stemming from almost countrywide closures of businesses in various industries — from entertainment to retail — will not be seen for years. However, the first estimates have already started to emerge, and the picture is quite gloomy. 

According to Moody’s study, which was carried when 41 states shut down non-essential businesses, California alone lost $2.8 billion a day, equivalent of more than 31.5 percent of the state’s daily gross domestic product (GDP).

The drop of output in 15 other states, responsible for almost 70 percent of all the US daily GDP, is $12.5 billion, while 30 other states together with Washington DC are losing a total of $4.9 billion of GDP per day.

The economic fallout (in terms of output drop) of the coronavirus crisis has already turned worse that the consequences of the 9/11 terrorist attacks, according to the agency’s data. As the result of three weeks of government-imposed closures, US output tumbled by around $350 billion, while the attacks had cut it by an estimated $111 billion in current dollars.

MVB Financial Corp. (NASDAQ: MVBF) (“MVB Financial” or “MVB”) and its wholly-owned subsidiary MVB Bank, Inc. (“MVB Bank”) announced that MVB Bank has purchased the deposits and certain assets of The First State Bank (“First State”) through an agreement with the Federal Deposit Insurance Corporation (FDIC). The West Virginia Department of Financial Institutions declared First State insolvent today and appointed the FDIC as receiver. The purchase by MVB Bank is effective immediately. As of December 31, 2019, First State had approximately $139.5 million in total deposits.

“We are pleased to welcome the clients of First State to the MVB family and want to assure them that their deposits are safe, secure and readily accessible. It will be business as usual on Saturday at all of the former First State banking centers and drive-thru locations as First State becomes a part of MVB Bank,” said Larry F. Mazza, President and CEO, MVB Financial. “As a trusted partner on the financial frontier, we are committed to the success of the clients and communities we serve.”

All deposits are being assumed by MVB Bank resulting in no losses to any depositor. Client deposits will continue to be insured by the FDIC up to applicable limits, and clients do not need to take any immediate action to maintain that insurance coverage. Over the weekend, First State clients will be able to access their money by writing checks, accessing online banking or using an ATM or their debit card. Banking centers will operate under normal business hours on Saturday. To protect the health and safety of Team Members and clients during the ongoing COVID-19 situation, banking center lobbies will be open by appointment only.

“MVB Bank’s strong financial position has enabled us to complete this strategic purchase. Our solid performance validates our focus on asset quality, liquidity and strong capitalization,” Mazza said. “This acquisition aligns with MVB’s strategy for growth in our core commercial markets in West Virginia and Northern Virginia, which also powers our expanding Fintech vertical.”

Clients of First State with questions about the transaction may call the FDIC directly at 1-800-517-1839.

About MVB Financial Corp.

MVB Financial Corp. (“MVB Financial” or “MVB”), the holding company of MVB Bank, Inc., is publicly traded on The Nasdaq Capital Market® under the ticker “MVBF.” Nasdaq is a leading global provider of trading, clearing, exchange technology, listing, information and public company services. Through its subsidiary, MVB Bank, Inc., and the Bank’s subsidiaries, MVB Mortgage, MVB Community Development Corporation and Chartwell Compliance, the company provides financial services to individuals and corporate clients in the Mid-Atlantic region and beyond. For more information about MVB, please visit http://ir.mvbbanking.com.

Forward-looking Statements

MVB Financial Corp. (the “Company”) has made forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in this Press Release. These forward-looking statements are based on current expectations about the future and subject to risks and uncertainties. Forward-looking statements include, without limitation, information concerning possible or assumed future results of operations of the Company and its subsidiaries. When words such as “plans,” “believes,” “expects,” “anticipates,” “continues,” “may” or similar expressions occur in this Press Release, the Company is making forward-looking statements. Note that many factors could affect the future financial results of the Company and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in the forward-looking statements contained in this Press Release. Those factors include but are not limited to: credit risk; changes in market interest rates; inability to achieve anticipated synergies; ability to successfully integrate recent mergers and acquisitions, including First State; competition; length and severity of the recent COVID-19 (coronavirus) outbreak and its impact on the Company’s business and financial condition; economic downturn or recession; and government regulation and supervision. Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as well as its other filings with the SEC, which are available on the SEC website at www.sec.gov. Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements.

After posting better-than-expected results for 2019, Chinese banks face the prospect of worsening asset quality and pressure on profits this year, as the coronavirus pandemic takes a toll on the global economy, bankers and analysts said.
With the pandemic now having spread to more than 200 countries and claiming more than 52,000 lives, bankers said they expected a bigger impact on China’s economy. Since the country plays an outsize role in the global supply chain, its banks are likely to take a hit should the global economy contract this year, which seems like a real possibility, they said.
“If the global coronavirus is not contained by the third quarter, this will have a great impact on the Chinese economy [and] on Chinese banks,” Zhang Gengsheng, executive vice-president of China Construction Bank (CCB), said during a teleconference held this week to discuss the bank’s annual results.
The deadly virus, which causes the Covid-19 respiratory disease, brought most of China’s economy to a halt in late January and February after authorities took measures to contain the outbreak. This has already translated into more overdue loans and a drop in growth in new customers, especially for banks’ credit card and retail loan businesses, bank officials said.
“We saw a pickup in overdue loans, primarily in the credit card and personal loans segments, in January and February,” Jin Yanmin, CCB’s chief risk officer, said. “Overall, for the full year, we expect non-performing loan [NPL] ratios for our micro-small business loans segment to steadily tick up.” He, however, added that overall asset quality was improving.
Both CCB and the Industrial and Commercial Bank of China, the largest lender globally by assets, said about 5 per cent of their small and medium-size business borrowers had requested an extension of loan repayments. Last month, regulators announced special measures allowing borrowers affected by the outbreak to extend their loan repayments up to the end of June.
The 10 major Chinese banks covered by brokerage CMB International Securities have reported, on average, an 8.6 per cent year-on-year net profit growth for 2019, compared with 6.1 per cent in 2018. These include the six major state-owned lenders, such as CCB, Agricultural Bank of China and Bank of China, and joint-stock banks such as China Merchants Bank and Ping An Bank.
NPL ratios were largely stable at the state-owned banks, at around 1.4 per cent. But CMB International Securities analyst Terry Sun expected NPL pressure to worsen during the second quarter and second half of this year.
“Companies’ existing orders and cash-on-hand will still be able to support their loan repayment in the first quarter, but lack of demand [for their products] and break of the supply chain will amplify the impact in the second and third quarters, even as companies increasingly resume work,” Sun said.
Net interest margin (NIM), a gauge of bank profitability, was largely stable for most banks during the fourth quarter of 2019, Morgan Stanley analysts including Richard Xu and John Cai said in a note.
“However, most banks expect more NIM pressure in 2020, citing existing loans pricing conversion (to loan prime rate) amid challenging domestic and global macro environments, and resilient deposit costs,” they said.

在中国近期进一步向外资开放资产管理和证券行业之后，摩根大通公司同意收购在中国一家合资共同基金管理公司中当地合作伙伴的全部持股，从而全资持股该公司。

据彭博社报道，摩根大通周五发布声明，将收购上海国际信托有限公司持有的上投摩根基金管理有限公司49%的股份。摩根大通没有透露购买价格。

中国数以万亿美元的资产管理市场本周进一步开放，摩根大通是众多公司中率先寻求完全控股在中国共同基金业务的资产管理公司。从4月1日开始，外国公司可以首次成立独资的资产管理公司和投资银行，或者寻求收购当地合作伙伴的持股。

摩根资产管理公司的董事长贝特曼（Paul Bateman）在一份声明中表示，“随着我们在这个至关重要的市场上推进在岸业务，我们期待继续满足中国和国际投资者不断变化的需求。”

中国国家外汇管理局资本项目管理司司长叶海生表示，近期改进外债管理措施，客观上旨在为境内主体跨境融资提供较大的便利；而作为融资主体的企业，需理性对待，绝不可盲目地借外债加杠杆。

《中国外汇》杂志刊登署名叶海生的文章并指出，当前受新冠肺炎疫情全球扩散的影响，国际市场动荡加剧。由于疫情发展具有不确定性，市场情绪的影响还会持续，故在当前市场环境下，企业开展跨境融资面临的汇率风险急剧增加。

“3月份以来，随着全球市场各类资产价格的暴跌，不少机构认为是‘抄底’的好机会，要求监管机构放松资金流出限制（如放宽QDII额度），这种想法未免太过天真和理想化。”他在文章中说。

叶海生并称，经济向好适当加杠杆可以获得较高收益；但在当前形势下，加杠杆无异于“自杀”。实际上，去年以来已有不少机构在境外投资中尝到了加杠杆的“苦果”。

市场主体要强化外债风险管控，尤其是外债借入环节的汇率风险管理，防范于前，坚持汇率中性原则。在当前市场波动较大的情况下，要充分考虑汇率变化的经济风险，并增对加汇率变化的敏感性分析，利用交叉货币利率掉期工具或组合期权等工具进行风险管理。

上月中国人民银行和国家外汇管理局发布通知称，将全口径跨境融资宏观审慎调节参数由1上调至1.25，政策调整后跨境融资风险加权余额上限相应提高。随后国家外管局又将外债便利化试点范围扩大至上海（自由贸易试验区）、湖北（自由贸易试验区及武汉东湖新技术开发区）、广东及深圳（粤港澳大湾区）等省市。

叶海生指出，上述外债政策调整，不会引发外债规模的大幅上升，也不会加剧中国的外债风险。同时，在具体操作中，相关管理部门也会严格把关。

“房地产企业、政府融资平台等受宏观调控的行业和企业，不能享受跨境融资宏观审慎管理政策，”他在文章中提到，“对享受便利化额度的试点企业，会严把资质关，严格规范操作，加强定期监测和事后监管。”

此前中国国家外汇管理局公布，截至2019年末中国全口径（含本外币）外债余额为20,573亿美元，较9月末增加78亿美元。外管局认为，中国外债风险总体可控。