Financial Services Talking Points | 04/08/2017

In today’s talking points: China’s top banks welcome new chiefs; China tightens up requirements for overseas investments;  Jingyi group looking to Australia; Sydney on track to become Asia-Pacific’s fintech hub.

China’s top banks welcome new chiefs

Former chairman of Bank of China, Tian Guoli, is named as the new chairman of China Construction Bank, succeeding Wang Hongzhang, who is retiring. Chen Siqing, previously Bank of China’s president, has been promoted to become the bank’s party secretary, a Communist party role that typically paves the way for him to take the chairmanship. The reshuffle at the top of two of China’s largest state-controlled banks is seen as an effort made by Chinese leadership to install people that they can trust to clean the troublesome financial industry. As President Xi Jinping prepares for a leadership transition this fall, China’s regulators have been attempting to clamp down on financial risks, with policymakers now targeting everything from corporate acquisitions to returns on savings products banks sell to yield-hungry consumers.

Read more at: SCMP

China tightens up requirements for overseas investments

The Ministry of Finance has new guidelines to tighten up scrutiny of overseas SOE investments, demanding SOEs to set up proper decision-making systems to carry out reliable financial decisions. SOEs are also required to send in on-site inspection and auditors to weight losses and risks in overseas projects. The goal is to strengthen the management of SOEs’ overseas projects, increasing investment efficiency, and to defeat the problem of low investment returns. Xu Baoli said the change will make “great significance” as the country is taking action on the Belt and Road Initiative that will involve a great deal of SOE investments with high economic risks.

Read more at: ChinaDaily

Jingyi group looking to Australia

Jingyi Group, a Chinese private equity firm, is looking to make its first entry into Australia by buying electronics group TTA and its sole office building, in a deal being brokered by Melbourne TST Partners. If the deal is successful, the TTA office building, which also doubles as the company’s warehouse, would become a $3.2 million passive investment for Jingyi Group and would be the most significant asset in the transaction.

Jingyi has plans to establish a funds management division in Australia, spanning property development, equities, fixed income securities and mortgage backed securities. The company also holds a licence to introduce WeChat Wallet – an app-based payment system used extensively across China – to Australia.

Read more at: The Australian Financial Review

Sydney on track to become Asia-Pacific’s fintech hub

Sydney is on track to become Asia-Pacific’s primary fintech hub, according to a recent report released by KPMG. In fact, Sydney’s growth in the sector is now outpacing the established hubs of Hong Kong and Singapore; compared to 2014 there are now roughly an additional 500 financial services companies operating out of the city. This rapid expansion has been bolstered by strong investment, even despite a global decline in investment in the industry.

Although the outlook for Sydney’s fintech industry looks bright, more can be done to encourage innovation and promote greater growth, particularly in regards to regulatory changes. The industry should also work hard to target Australian consumer’s demands, which include the need for fast and easy access to finance and payment services for home buying and mortgages.

Read more at: The Australian