BRIEFING - ASIA BANKING - MAY 20, 2009

An executive briefing on banking for May 20, 2009, prepared by Asia Pulse (http://www.asiapulse.com), the real-time, Asia-based wire with exclusive news, commercial intelligence and business opportunities.

WESTERN UNION OPENS 2ND CALL CENTRE IN PANKISTAN FOR REMITTANCES

LAHORE - Western Union has set up a second call centre in Punjab in order to ensure prompt remittances from all Pakistan's remote sub-post offices.

It is a joint venture between the Post Office Department and Western Union.

S KOREAN FIRMS SEE 2008 PROFITABILITY DIP, SUFFER HIGHER DEBT

SEOUL - South Korean companies' profitability deteriorated to a seven-year low in 2008 as a weaker won led to foreign exchange losses, eclipsing their increased sales, the central bank said Wednesday.

The ratio of local companies' pre-tax net income to sales, a key barometer of profitability, reached 2.9 per cent last year, sharply down from 5.5 per cent from a year earlier, the Bank of Korea (BOK) said in a report based on a survey of 7,097 companies. The ratio marked the lowest level since 2001 when the rate reached 1.7 per cent.

JAPAN'S START-UP MARKETS SHOULD EASE OVERSIGHT RULES: REPORT

TOKYO - The nation's stock markets for start-ups should loosen some of the internal oversight regulations imposed on companies that list on their bourses to lessen cost burdens, according to recommendations issued Tuesday by a securities association committee.

Members of the Japan Securities Dealers Association committee noted how start-ups listing in the U.S. are exempted from compliance inspections as well as the submission of internal oversight reports in the first year. Because companies on Japan's bourses are required to provide such information from the first fiscal year, there is room for easing regulations, according to the report.

JAPAN'S TOP BANKS HIT WITH Y1.17TLN IN COMBINED NET LOSSES FOR FY08

TOKYO - The nation's six major banking groups logged an aggregate consolidated net loss of 1.17 trillion yen (US$12.2 billion) for the year ended March 31, marking their first fall into the red in five years.

Massive impairment charges on shareholdings and disposals of nonperforming loans exacted heavy tolls on the fiscal 2008 earnings at Mitsubishi UFJ Financial Group Inc. (TSE:8306), Mizuho Financial Group Inc. (TSE:8411), Sumitomo Mitsui Financial Group Inc. (TSE:8316), Resona Holdings Inc. (TSE:8308), Chuo Mitsui Trust Holdings Inc. (TSE:8309) and Sumitomo Trust & Banking Co. (TSE:8403).

KEY JAPAN GOVT PANEL URGES CONVERTIBLE TAX CREDIT SCHEME

TOKYO - Poor childrearing families and others paying little or no taxes should receive cash supplements that incrementally change into a tax credit as their incomes rise, nongovernment members of the Council on Economic and Fiscal Policy recommended Tuesday.

One of the advantages of the plan is that recipients are entitled to the same amount of support -- in the form of cash, a tax credit or a combination of both -- as their incomes increase. For example, a person owing no income taxes would receive 50,000 yen (US$520), while an individual owing 100,000 yen would get a 50,000 yen tax credit, reducing his or her payment by half. And unlike unemployment benefits, the support continues after a recipient starts working, ending only after income crosses a certain threshold.

S. KOREA SHOULD KEEP EXPANSIONARY MONETARY, FISCAL POLICIES: EXPERTS

SEOUL - The government and the central bank should keep their expansionary policies as it is premature to say the South Korean economy is beginning to recover, experts here said Wednesday.

"The financial market has recently stabilized and a decline in the real economy has eased... But (authorities) should continue to make efforts in terms of monetary and fiscal policies as it is too early to say that the economy is entering a recovery phase," experts were quoted by saying in a statement released after Bank of Korea (BOK) Gov. Lee Seong-tae met with five economists.

AUSTRALIAN BOND MARKET WEAKER AT NOON - MAY 20, 2009

SYDNEY - The Australian bond market was weaker at noon.

At 1200 AEST, the yield on the Commonwealth Government March 2019 bond was 5.022 per cent, up from Tuesday's close of 4.998 per cent, while the yield on the April 2012 bond was at 3.983 per cent, up from 3.940 per cent.

JAPAN'S TOPPAN FORMS DEVISES E-MONEY WRISTBAND FOR FITNESS CLUBS

TOKYO - Toppan Forms Co. (TSE:7862) has developed a smart wristband with an e-money feature for members of fitness clubs.

The wristwatch-shaped device offers club members the convenience of using lockers, purchasing items from vending machines and even patronizing local restaurants and game centers without the need to carry around keys or cash.

AUST CO REX Q3 PRE-TAX PROFIT FALLS 6.3% AS PASSENGER NOS. SLUMP

SYDNEY - Regional Express Holdings Ltd (ASX:REX) says its third quarter profit fell 6.3 per cent as passenger numbers decline, and warned its annual earnings will be lower than last year.

The regional airline operator said pre-tax profit for the three months ended March 31 fell to $A7.5 million ($US5.8 million), from $A8 million ($US6.19 million) in the same period last year.

THREE INDONESIAN BANKS TO OPEN SHARIA UNITS SOON

JAKARTA - Three national banks are in the process of opening sharia units to respond to growing demand for sharia banking services, a senior economic official said.

"Sharia banks have increasingly become attractive particularly during the current financial crisis that prompts a number of conventional banks to open sharia units. Three more banks are now in the process of opening sharia units," assistant to the coordinating minister for economic affairs Muhammad Ikhsan said at a seminar here on Tuesday.

AUSTRALIAN BOND MARKET OPENS WEAKER - MAY 20, 2009

SYDNEY - The Australian bond market has opened weaker as investors reduce expectations of more cuts to interest rates by the central bank.

At 0830 AEST, the yield on the Commonwealth Government March 2019 bond was 5.033 per cent, up from Tuesday's close of 4.998 per cent, while the yield on the April 2012 bond was at 4.013 per cent, up from 3.940 per cent.

JAMES HARDIE OPERATING PROFIT FALLS 44PCT AS US SALES SLUMP

SYDNEY - James Hardie Industries NV's (ASX:JHX) full year operating profit declined 44 per cent as the building materials maker suffered from a further slump in US fibre cement sales.

Net operating profit - excluding asbestos, Australian Securities and Investments Commission (ASIC) related expenses, asset impairments and tax adjustments - fell to $US96.9 million ($A126.78 million), from $US173.8 million the year before.

AUSSIE BREWER LION NATHAN PROFIT UP, WELL PLACED TO "THRIVE"

SYDNEY - Brewer Lion Nathan (ASX:LNN) has delivered a "strong" first half net profit up 6.9 per cent, and says it's "well placed to thrive" in the current market environment.

Lion Nathan, currently subject to a takeover process from Japan's Kirin, forecast net profit for the full year of $A305 million ($US236.01 million) to $315 million, on "robust beer market fundamentals".

AUST'S AWB H1 PROFIT FALLS 61.6%, SAYS NO PLANS FOR CAP RAISING

SYDNEY - Agribusiness AWB Ltd's (ASX:AWB) first half net profit declined by 61.6 per cent as the former wheat export monopoly battled a challenging environment for its business.

The company said it had no plans to conduct a capital raising and that it expects to see further consolidation in its industry.

S KOREA'S SHORT-TERM FLOATING MONEY IS NOT EXCESSIVE: FINANCE MINISTER

SEOUL - South Korea's top policymaker said Tuesday the quantity of short-term floating money unleashed in the market is not excessive but the government is still closely monitoring money flow.

"We do not agree with the claim that too much short-term floating money has been released," Finance Minister Yoon Jeung-hyun told reporters in a meeting marking his 100th day in office since inauguration in February. "We are not considering a change in our overall policy stance."

INDIA'S IDBI BANK REDUCES DEPOSIT RATES

MUMBAI - State-run IDBI Bank (BSE:500116) on Friday slashed deposit rates by 50-100 basis points effective from May 21.

Deposits below Rs 15 lakh (US$31,546) having a maturity of one to less than two years will now carry a rate of 7.5 per cent as against eight per cent earlier, while those having a tenure of two years to less than 1,100 days will get 7.75 per cent (8.25 per cent earlier), a press release issued here said.

INDIA'S DENA BANK TARGETS BUSINESS OF US$26.5 BLN IN 3 YEARS

KOCHI - Public-sector lender Dena Bank (BSE:532121) aims to touch a business of Rs 126,000 crore (US$26.5 billion) in the next three years, with plans to open 400 new branches, a senior official has said.

The bank's current year business target was Rs 85,000 crore against last year's Rs 72,000 crore, the bank's Chairman and Managing Director D L Rawal told reporters here Thursday night.

20 INDIAN PSU BANKS FAIL TO MEET FARM SECTOR LENDING TARGET TILL NOV

NEW DELHI - As many as 20 public sector banks, including big ones like Canara Bank (BSE:532483), Bank of Baroda (BSE:532134) and Union Bank (BSE:532477), have failed to achieve the annual farm sector lending target till November 2008.

Only seven out 27 state-owned banks could achieve the stipulated target of disbursing 18 per cent of the net bank credit to the agriculture sector as on November last year, sources said.

INDIA'S BIRLA SUN LIFE PAYS US$2,629 TO SEBI AS SETTLEMENT MONEY

MUMBAI - Asset management firm Birla Sun Life paid Rs 1.25 lakh (US$2,629) as settlement amount to the Securities and Exchange Board of India (SEBI) for launching a different financial product in place of those for which it had received approval from the regulator.

Birla Sun Life Asset Management Company Limited had sought approval from SEBI to launch Monthly Plan-Series I and II and Quarterly Plan Series-I, II and III and was approved by the regulator.

INDIA'S INFLATION MAY AGAIN START RISING, TOUCH 5.5 PCT BY FISCAL END

NEW DELHI - Inflation, currently at 0.48 per cent, may again rise to around 5-5.5 per cent by this fiscal end, forcing the Reserve Bank to tighten money supply, says financial services firm Nomura.

"We expect Wholesale Price Index Inflation to rise to around 5-5.5 per cent by end of the fiscal 2009-10, against the RBI's 4 per cent target," Nomura said in a report.

RBI WANTS INDIAN BANKS TO REDUCE CHARGES ON TRANSFER OF FUNDS

HYDERABAD - Expressing concern over reluctance of banks to pass on benefits of technology to customers, RBI Governor D Subbarao on Tuesday asked banks to reduce service charges on transfer of funds even while suggesting they should make use mobile telephony to further expand their reach.

"By imposing charges (on transfer of funds) not commensurate with cost of services provided, we risk losing this fundamental trust that underlines our banking relationship," Subbarao said while speaking at the Banking Technology Awards 2009.

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