April 26, 2024

Former Bank Employees Protest in Beijing

The crowd, which organizers said included as many as 3,000 middle-aged men and women from across China, appeared to overwhelm the police. Officers largely stood by as the protesters held aloft signs saying, “I’ve been wronged.”

It is not the first time the former bank tellers, accountants and branch managers have sought to publicize their grievances, which stem from a restructuring of China’s four largest banks as they prepared to go public, forcing out about 400,000 people during the decade-long purge. Many of those fired were over 40, and some were nearing retirement.

Analysts, citing bloated work forces, say the downsizing was a necessary component of a modernization effort that transformed the country’s socialist-era banking sector.

According to the London-based Banker magazine, four Chinese financial institutions are now among the world’s top 10 largest banks. The number one spot belongs to Industrial and Commercial Bank of China, or ICBC.

News of soaring profits have only angered those who were let go during the streamlining drive. Many say they were offered paltry compensation; those who refused the packages were fired anyway.

“We’re just asking for fairness, seeking to regain our former jobs or receive compensation,” said Zhang Guoxi, one of the protest organizers and a former ICBC employee.

Mr. Zhang, who gave a brief speech to the crowd, said many would-be protesters were thwarted by the police before they could reach the State Bureau for Letters and Calls, a forbidding structure south of Tiananmen Square that draws throngs of petitioners each day — as well as men, employed by local governments, whose job it is to stop them from entering the building to file their grievances.

Public security officials responded with a show of force that included scores of public buses. But rather than herd protesters onto the buses, the police stood by as the crowd chanted slogans like “We want to eat.” At one point, an officer taunted the crowd, shouting, “Then go back home and ask your mother for food.”

Yuan Chang contributed research.

Article source: http://www.nytimes.com/2013/07/23/world/asia/former-bank-employees-protest-in-beijing.html?partner=rss&emc=rss

DealBook: China’s Wealth Fund Buys Stake in British Utility

Workers for Thames Water Utilities repaired a leak on London's Oxford Street on Friday.Simon Dawson/Bloomberg NewsWorkers for Thames Water Utilities repaired a leak on London’s Oxford Street on Friday.

6:38 p.m. | Updated

LONDON — The China Investment Corporation, the country’s sovereign wealth fund, announced Friday that it had acquired an 8.68 percent stake in Thames Water, Britain’s largest water and sewerage company.

This is the first investment in Britain by the China Investment Corporation, which was created in 2007 and has $410 billion of assets under management as of 2010, the latest figures available. The sovereign wealth fund was established to invest the proceeds from China’s foreign currency reserves, which total more than $3 trillion.

The value of the deal was not disclosed, but it was welcomed by George Osborne, Britain’s chancellor of the Exchequer.

“It is a vote of confidence in Britain as a place to invest and do business,” Mr. Osborne said in a statement. “This investment is good news for both the British and Chinese economies.”

The announcement follows a recent trip by Mr. Osborne to China in an effort to increase trade between the two countries. British officials announced Friday the creation of a working group with the Industrial and Commercial Bank of China, the world’s largest bank by market capitalization, to promote Chinese investment in British infrastructure projects.

George Osborne, second from left, Britain's chancellor of the Exchequer, met with officials in Beijing this week.David Gray/ReutersGeorge Osborne, second from left, Britain’s chancellor of the Exchequer, met with officials in Beijing this week.

This week, Mr. Osborne said he wanted to turn London into a major foreign exchange trading center for the Chinese renminbi to benefit from faster growth in Asia, while strengthening the city’s position as a financial center after the banking crisis.

Last year, the China Investment Corporation chairman, Lou Jiwei, said the sovereign wealth fund was looking to invest in the infrastructure of developed countries, including Britain.

Thames Water, which oversees the water network in southern England, has attracted attention from sovereign wealth funds before. In December, the Abu Dhabi Investment Authority said it had acquired a 9.9 percent share of Thames Water.

The British water utility company is owned by a consortium of firms led by the Australian bank Macquarie. The group bought Thames Water, which has about 14 million customers, from the German company RWE in 2006 for £8 billion ($12.4 billion).

Article source: http://feeds.nytimes.com/click.phdo?i=e65cd82ac0c0fc6fb3655a0e2d261809

China’s Sovereign Wealth Fund Buys Shares in Major Banks

That word, disclosed by the banks late in Monday’s trading session, helped their share prices rebound somewhat on the Hong Kong stock exchange.

Chinese bank stocks have lost a third of their value so far this year, with most of the losses since August. Compared with the battered stocks of many European banks, the decline does not reflect worries about Greek bonds — Chinese banks have very few — but rather about the effects of stricter capital requirements by China’s regulators and worries about possible losses on domestic loans.

The China Banking Regulatory Commission is putting heavy pressure on banks to raise capital. The regulators want to prepare banks to meet rising international standards for capital adequacy and to strengthen the banks’ balance sheets against possible losses on big loans issued to Chinese companies and local governments during China’s economic stimulus program in 2009 and 2010.

The Agricultural Bank of China, one of the four main banks that together control two-thirds of the Chinese banking market, has already said that it intends to raise more capital next year. And investors have been watching for moves to sell shares by the other three: the Industrial and Commercial Bank of China, China Construction Bank and the Bank of China.

“One of the things depressing the share prices is that the existing public shareholders worry that they’re going to get diluted,” said Nicholas R. Lardy, a senior fellow at the Peter G. Peterson Institute for International Economics in Washington.

According to filings the four banks made with the Hong Kong stock exchange, the share purchases on Monday were made by Central Huijin, a holding company that is part of the country’s sovereign wealth fund, the China Investment Corporation. Central Huijin has a tangled history that has complicated China’s ability to regulate its banks.

Central Huijin already owns stakes in the banks that range from 35.4 percent of Industrial and Commercial Bank to 67.6 percent of the Bank of China. The purchases Monday will not alter these percentages significantly.

The central bank set up Central Huijin in 2003 to bail out the country’s banks after a surge in losses on loans issued to politically connected, state-owned enterprises in the mid-1990s.

Central Huijin was transferred in 2007 to the China Investment Corporation, which had been set up to invest part of the country’s foreign exchange reserves in the stock market. The move was controversial, in part because it involved issuance of bonds to compensate the central bank for the transfer. China Investment promised that it would collect enough dividends from the banks to make payments on the bonds.

As a result of that promise, the big Chinese banks have been paying out roughly half of their earnings in dividends since then, compared with only 10 to 12 percent for many industrial companies. That has slowed the banks’ ability to comply with regulators’ demands to build capital reserves.

The high dividend payouts, in conflict with the need to raise capital, have started to prompt grumbling by Chinese bank executives. Xiang Junbo, the chairman of the Agricultural Bank of China, was quoted in July by The Study Times, a weekly publication controlled by the Communist Party School, as saying that the country’s big banks “should avoid high levels of dividend payments while we are frequently going to the market for fund-raising exercises.”

But Lou Jiwei, the chairman of the China Investment Corporation, has said that Central Huijin needs 300 million renminbi a day, or $47 million, just to pay the interest on the bonds issued to compensate the central bank. Central Huijin cannot easily sell its shares in the banks to raise money for servicing that debt, because this would increase the number of shares in public circulation and could further depress the stock prices.

The announcements by the big four banks reversed a slide in their share prices earlier in the day. They posted small gains by the close, except for China Construction Bank; it fell 0.21 percent on the day, closing at 4.83 Hong Kong dollars, but was up from earlier lows.

Another worry for the banks lies in their exposure to special borrowing units of local governments. China’s National Audit Office said at the end of June that those loans — mainly for infrastructure projects that helped China spend its way out of the global economic downturn — had totaled 10.7 trillion renminbi, or $1.7 trillion, by the end of 2010.

The debt burden from those loans is putting heavy pressure on local governments to raise the fees for water, sewage and other municipal services that were greatly improved with the loans, but which continue to be provided to the public for less than their cost, Mr. Lardy, of the Peterson Institute, said.

Article source: http://feeds.nytimes.com/click.phdo?i=38aa7018651d9b50f96045993c925c2d

Economix Blog: For Some Banks, Prices Are Below 2008

Mizuho Financial, Japan: -24% from 2008-’09 low, -26% since the beginning of 2011

Sumitomo Mitsui, Japan, -16%, -24%

Mitsubishi UFJ, Japan, -8%, -20%

Credit Suisse, Switzerland, -4%, -42%

Crédit Agricole, France, 0%, -36%

Bank of China, China, +4%, -9%

Commerzbank, Germany, +5%, -57%

Sumitomo Mitsui, Japan, +7%, -24%

Bank of New York Mellon, U.S., +7%, -36%

Société Générale, France, +16%, -48%

Industrial and Commercial Bank of China, +23%, -3%

UBS, Switzerland, +35%, -12%

Lloyds Bank, Britain, +42%, -57%

Banco Santander, Spain, +52%, -23%

UniCredit, Italy, +54%, -42%

Banco Paribas, France, +58%, -31%

Hang Seng Bank, Hong Kong, +61%, -15%

Nordea Bank, Sweden, +66%, -27%

HSBC, Britain, +68%, -22%

Morgan Stanley, United States, +76%, -40%

Deutsche Bank, Germany, +76%, -30%

Bank of America, United States, +122%, -48%

Citigroup, United States, +170%, -24%

Wells Fargo, United States, +191%, -24%

Barclays, Britain, +194%, -42%

Article source: http://feeds.nytimes.com/click.phdo?i=bfeae9335cf9dd97abd4766e144c6173