Download Slow-moving train picking up speed Standing at

ban glades h , b rune i
As ia P acif ic
Au str alia
Bang l ade sh
Br u n e i
Ch in a
Ho n g Ko n g
Slow-moving train picking up speed
In dia
In d o n e s ia
J apan
M ala ysia
P a k ista n
State-owned commercial banks prepare to commercialise as the
country readies itself for the introduction of Basel II
P h ilip pin e s
Sin g apo r e
So u th Ko r e a
Sr i L an k a
Ta iwa n
Th a ilan d
Vie tn am
D
espite the global economic crisis, Bangladesh
ration for the introduction of Basel II to improve the
has displayed resilience as GDP grew by 5.9% in
quality of banks’ capital, creating risk management
the first half of 2009, with a forecast for 5.3% growth
units at all banks and requiring commercial banks
in 2010 on the back of gradual global recovery and in-
to operate their merchant banking business under
frastructure development. The prime rates have been
separately formed subsidiaries. It also introduced
kept loose with Bangladesh Bank (BB), the central
the Dhaka Inter-bank Offered Rate (DIBOR), the last
bank, urging reluctant banks to lend more to the SME
country in South Asia to do so, in order to develop
community to stimulate further growth, although it
an interbank market.
has noted a general rise in loans and deposits with a
The country has is an expansion destination for
coinciding fall in NPLs—banks in Bangladesh enjoyed
foreign banks, especially those from Sri Lanka, such
shielding from global turmoil due to a “low level of
as Hatton National Bank and NDB Bank. Bangladesh’s
global integration”. BB has been very active in 2009,
second-largest lender, state-owned Janata Bank, plans
setting guidelines for its seven Islamic banks, shifting
to raise $145 million in what will be the country’s big-
authority from Shariah councils to the bank boards
gest ever IPO. After Southeast Bank NPLs surged 74%,
in a hope to develop the industry.
the central bank put it on a watchlist and installed
Since early 2000, the Bangladesh government has
implemented reforms to the financial sector in prepa-
the general manager of foreign exchange investment
department, to monitor it.
Asia P acif ic
Au s tr alia
Ban g la de s h
Brun ei
Ch in a
Ho n g Ko n g
In d ia
In do n e s ia
J a pan
Ma la ysia
P ak ista n
Standing at the cusp
The sleepy Bruneian market, staring down an era of stagnancy,
has not broken free from oil
P h ilippin e s
Sin gapo r e
So u th Ko r e a
Sr i L a n k a
Ta iwa n
T h a ilan d
V ie tn am
B
runei’s GDP is expected to contract by 1.2% in
The downturn in the economy is expected to hit all
2009, according to a heavily-downgraded Asia
areas of business for Brunei’s handful of small banks.
Development Bank (ADB) forecast, caused mainly by
Baiduri Bank, the largest in Brunei with only $1.78
falling oil and gas prices and the global downturn.
billion in assets, has a relatively well-developed retail
Likewise, the ADB’s forecast for GDP growth in 2010
business and may be better positioned than Bank
is 2.3%, driven by public spending and a return to
Islam Brunei Darussalam and Perbadanan Tabung
higher energy prices.
Amanah Islam Brunei, which are less diversified;
Since 2006, Brunei authorities have been methodically implementing new regulatory measures to
but Baiduri Bank is also expected to feel a surge in
mortgage and credit card NPLs going forward.
develop its domestic Islamic banking sector and re-
In late 2009, HSBC included Brunei among the many
duce reliance on oil and gas. These measures include
markets around Asia that it is opening for crossborder
setting minimum capital adequacy ratio and cash
renminbi settlement, following China’s gradual currency
balances on deposits for banks, passing the Islamic
dereglation. Although volumes of renminbi clearing are
Banking Order, Islamic Banking Regulations, Takaful
expected to be small initially, Brunei is the smallest and
Order and Takaful Regulations. But so far, attempts
most oil-dependent of the economies on its list and may
to establish an Islamic finance centre have not seen
provide a strong indicator of how the business will move
much success.
ahead, given China’s heavy thirst for oil.
ISSUE 94
ABJ ISS-94(PG1-60).indd 35
The Asian Banker
35
12/23/09 10:44:04 PM