credit

By Ben Aris of bne in Moscow

Unless you live in Moscow and are in the retail business, you probably haven’t heard of Moskovsky Kreditni Bank (Credit Bank of Moscow, in English). But you may soon. A top-20 Russian bank, CBM is joining the increasingly long line of Russian companies that want to IPO on London’s stock exchange.

“We are contemplating an IPO, but have not decided on specific timing or plans,” CBM’s CEO, Vladimir Chubar, tells bne in an exclusive interview. “It depends on if the market improves, as the current valuation levels for Russian banks are not necessarily attractive. We are still growing, we have one of the lowest cost/income ratios and the return on equity of about 18-20% is one of the best in the sector. We feel like we are still quite a young bank and will wait for the right window of opportunity to open.” Continue reading »

We’re late to this but we couldn’t resist sharing a chart from JP Morgan’s latest Global Data Watch, dated January 31. It shows part of the reason why Bruce Kasman and colleagues are bearish about the prospects for EM growth in 2014.

This from the report: Continue reading »

Another stimulating note from the always-readable Frederic Neumann at HSBC in Hong Kong, titled An inconvenient truth. In it, he looks at the relation in Asia ex Japan between credit on one side and productivity and growth on the other.

The results are more disturbing than inconvenient. Continue reading »

Central banks, we are often told, missed the warning signs that led to the “Great Recession” in 2008: an excessive build-up of household and mortgage debt.

But Malaysia’s central bank, Bank Negara, is showing that you can get ahead of the curve and prevent trouble before it starts to build up to critical levels. That’s the hope, at least. Continue reading »

Recent editions of the IMF’s World Economic Outlook have made pretty gloomy reading for developed economies, with growth forecasts trimmed and few recovery prospects.

But despite the global headwinds, emerging markets are still getting a positive writeup from the Fund’s economists. Here are the charts that tell the story. Continue reading »

China isn’t holding back in its financial support for a flagging economy. The latest lending figures, published on Thursday, show banks made new local-currency loans totalling Rmb1.06tn ($171.2bn) last month – far more than forecast by analysts polled by Reuters and Bloomberg.

That puts Chinese lenders on target to lend Rmb9tn in new loans this year – well up on last year’s Rmb8.2bn. Continue reading »

By Nguyen Phuong Linh and Jake Maxwell Watts

It was almost inevitable that Vietnam’s central bank would cut interest rates for the seventh time in a row on Monday. What is much less certain is whether the move will succeed in boosting the country’s struggling economy, with commercial banks reluctant to pass on lower interest rates to cash-strapped businesses. Continue reading »

China is to rein in its fast-growing shadow banking system by requiring banks to provide extensive disclosures about the off-balance sheet investment products that they sell to customers, according to people briefed on the new rules.

The Chinese shadow banking system – credit flows beyond traditional bank loans – has increased fourfold in size since 2008 to about Rmb20tn ($3.2tn), or 40 per cent of gross domestic product. These flows were crucial in reviving the country’s growth last year, but banking analysts and rating agencies have warned that they pose an increasingly serious risk to Chinese economic stability.

 Continue reading »

Hot on the heels of Chinese prime minister Wen Jiabao’s call this week for curbs in the over-heated housing market, comes official data showing China’s new home prices rose in January for the third month in a row

The National Bureau of Statistics said on Friday that, on a month-to-month basis, prices rose in 53 of the 70 cities covered in its survey, with striking increases in Beijing and Shanghai. No wonder the authorities are worried. Or that equity investors have taken fright, with the Shanghai Composite index falling this week by 4.9 per cent, its biggest weekly drop since mid-2011. Continue reading »

How gloomy can you get? The Brazilian central bank’s latest weekly survey of market economists suggests the sky, or rather the ground, is the limit. The survey’s consensus on GDP growth this year is now 3.2 per cent, down from 3.26 per cent a week earlier, 3.3 per cent the week before that, 3.4 before that, 3.5 before that, and so on back in time to late November, when it began falling from the 4 per cent that had been expected for several months.

But while growth is creeping down, inflation is creeping up. The two make a miserable combination. Continue reading »

David CreightonBy David Creighton of Cordiant Capital

With record flows into emerging market bonds you could be forgiven for thinking growth economies were awash with credit, and that they had avoided the fallout from the eurozone crisis.

Unfortunately this is not the case. The benefits of the boom in EM bonds have not been evenly spread. Not only is issuing bonds an option available uniquely to the very largest class of emerging market enterprises, but these bond issuers are generally concentrated within limited geographies like Brazil, China and Russia, and in the energy, mining and telecom sectors. Continue reading »

The crisis in the eurozone has been causing plenty of worries in Asia – particularly around the supply of credit to the region. But the bigger problem for many countries lies closer to home – in a dramatic reversal of the build up of surplus cash that has been Asia’s hallmark for the past decade.

Across the region, according to research from Morgan Stanley analysts, declining exports and strengthening domestic demand for goods produced locally and abroad are combining to cut current account surpluses. Continue reading »

From the FT’s Lombard column

Experian has struck a creditable deal to buy out minorities in Brazilian subsidiary Serasa, as it bulks up its emerging markets presence. The credit checking agency is paying $1.5bn for the 30 per cent stake, at the top end of City expectations. But at least the deal has a price and timing that suits Experian. The banks who are selling out possess a put option that could have triggered a transaction with neither characteristic. Continue reading »

Bank of Nova Scotia’s new chief in Mexico, Troy Wright, is enthusiastic about the growing purchasing power of Mexico’s middle class. “We see a lot of opportunity right now to really start to drive a lot more of the business, and take advantage of people’s credit health,” he told Bloomberg this week.  Continue reading »

Brazil’s government, retailers and banks are all interested in reviving the jaded Brazilian consumer, the driver of economic growth in recent years.

But interest rates in the country are phenomenally high, with users of credit cards, for example, paying an average of 238.3 per cent a year, according to Anefac, a financial sector association. Worse, the charges aren’t always as clear as they might be to the shoppers at the tills. Continue reading »