China

The project will have a focus on data security and address weaknesses in the financial sector.

This is the first such cut in more than four years.

Local governments may be resistant to give up control of their assets in regional banks.

In at least one deal, non-performing loans were sold at above-market rates.

They already have a system and network ready.

Even the world’s biggest fintech market, China, suffers from substantial industry risk.

Although growth is decelerating, the performance of Chinese banks has been resilient so far. Net profits of listed banks grew robustly in Q3 2019, higher than the same period in 2018. Such general improvement was also backed by a reduction in provisioning led by large banks. While the performance of large banks remained steady, the rebound came from small banks. The question really is why small banks have rebounded and whether it is sustainable. Thus, it is a good time to examine the recent financial results of Chinese banks and the reasons behind the improvement, especially for small banks.

Their reliance on government bonds and lack of structural change are worrisome in the long-term, according to Natixis.

The domestic market will grow at a CAGR of 13.7% from 2019-2023.

Digital payments and non-banking payment service providers are displacing them.

27% flagged the impact of trade tariffs on their businesses.

This exceeded analysts’ expectations of $197.9b.

AliPay and WeChat command 93.7% of the fintech market.

Household loans hit $92.25b.

The latest bailout of Bank of Jinzhou shows the intervention by the People's Bank of China (PBoC) on Baoshang Bank was not an isolated event. There are indeed fundamental solvency and liquidity issues for some small Chinese banks, widely influencing both bond market as well as broader financial sector.

Failure at the regional level may squeeze funding options for the NBFI sector.