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Chinese Bank With $100 Billion In Assets Is About To Collapse

While the western world (and much of the eastern) has been preoccupied with predicting the consequences of Trump's accelerating global trade/tech war and whether the Fed will launch QE before or after it sends rates back to zero, Beijing has quietly had its hands full with avoiding a bank run in the aftermath of Baoshang Bank's failure and keeping the interbank market - which has been on the verge of freezing - alive.

西欧社会ではトランプの貿易戦争の行方やFEDの金融緩和政策の行方で持ちきりだが、北京では静かに進行中だが銀行倒産阻止に手一杯だ、Baoshang 銀行倒産後の後遺症だ、そしてインターバンク市場はまだ生きてはいるが、凍結寸前状態にある。

Unfortunately for the PBOC, Beijing was racing against time to prevent a widespread panic after it opened the Pandora's box when it seized Baoshang Bank, the first official bank failure in an odd replay of what happened with Bear Stearns back in 2008, when JPMorgan was gifted the historic bank for pennies on the dollar.

PBOCにとっては不幸なことだが、Baoshang 銀行を国有化するというパンドラの箱を開けた後の混乱回避に北京政府は懸命だ、最初の公式銀行破綻であり、２００８年のベア・スターンズが思い起こされる、JPMorganは伝統ある銀行を二束三文で手に入れた。

And with domino #1 down, the question turned to who is next, and could it be China's Lehman.

そしてこれは最初のドミノ倒しで、問題は次はどこかということだ、そしてそれは中国のレーマンとなるかもしれない。

As a reminder, back in May, shortly after the shocking failure of China's Baoshang Bank (BSB), and its subsequent seizure by the government - the first takeover of a commercial bank since the Hainan Development Bank 20 years ago - the PBOC panicked and injected a whopping 250 billion yuan via an open-market operation, the largest since January. Alas, as we said at the time, it was too little to late, and with the interbank market roiling, with Negotiable Certificates of Deposit (NCD) and repo rates soaring (in some occult cases as high as 1000%) we said that it's just a matter of time before another major Chinese bank collapses.

５月末のことを思い起こすと、中国のBaoshang Bank (BSB）破綻とその後の国有化後ーーこれは２０年前の海南開発銀行以来初めての商業銀行国有化だったーーPBOCはパニクってなんと２５０B人民元を公開市場操作で金融システムに注入した、今年最大の量だった。なんということか、当時ZeroHedgeが書いたが、これは too little to lateであり、インターバンク市場を揺るがした（金利がオカルト的な数字1000%にもなった）ZeroHedgeはこれをみて次の中国での大型銀行倒産は時間の問題だと書いた。

And, in order to present the list of the most likely candidates, will picked those names that - just like Baoshang - had delayed publishing their latest annual reports, the biggest red flag suggesting an upcoming solvency "event." The list is below.

そして、その候補となる銀行を示すために、Baoshangと同様に直近決算開示が遅れている銀行を示そう、これから来る流動性「事件」に大きな赤旗が揺らいでいる。そのリストはこれだ。

We were right, because not even two months later, the second biggest bank on the list, Bank of Jinzhou has crawled in Baoshang's foosteps and is about to be seized by the government.

ZeroHedgeは正しかった、というのもその二月後に、この表の二番手の銀行、錦州銀行がBaoshangの後をたどっている、まさに国有化されんとしている。

According to Reuters and Bloomberg, Bank of Jinzhou recently met financial institutions in its home Liaoning province to discuss measures to deal with liquidity problems, and in a parallel bailout to that of Baoshang, the bank was in talks to "introduce strategic investors" after a report that China’s financial regulators are seeking to resolve its liquidity problems sent its dollar-denominated debt plunging.

ロイターとブルームバーグによると、錦州銀行は最近地元遼寧省の当局と流動性の問題を議論した、そしてBaoshangのときと同様に、ドル建て債権急落を解消を中国金融監督当局が模索しており、当行は「戦略的投資家導入」を求めている。

Officials including those from the People’s Bank of China and China Banking and Insurance Regulatory Commission recently held a meeting with financial institutions in Bank of Jinzhou’s home province of Liaoning to discuss measures to resolve the lender’s liquidity issues, Reuters reported Wednesday.

PBOC、China Banking　そして Insurance REgulatory Commissionからなる当局は最近錦州銀行と会合を持ち、貸し手の流動性について議論した、水曜ロイター伝。

In response to market fears the bank issued a statement on Thursday that "currently, Bank of Jinzhou’s business operations are normal overall,” which however did not refer to its liquidity situation. "Recently, the bank’s board of directors and some major shareholders have been in talks with several institutions that wish to and have the ability to to become strategic investors" adding that talks have been “going smoothly.”

市場の懸念に対して火曜に当行は声明を発表した、「現在のところ、錦州銀行の業務は正常だ、」しかし当行の抱える流動性問題に関しては言及しなかった。「最近、当行役員と主要株主は戦略的投資家となることを望む組織について議論した」更にこの議論は「順調である」と付け加えた。

By strategist investors it of course meant banks, backstopped by the government, who would "absorb" the bank, effectively nationalizing it a la what happened with Baoshang. The only question is whether stakeholders would also be impaired.

戦略的投資家とは当然のことながら銀行団だ、しかも政府の裏付けのある、当行を将来「吸収」する、Baoshangと同様に将来国有化する。唯一の問題は現在のステークホルドが毀損するかどうかだ。

As we reported in June, Jinzhou’s Hong Kong-listed shares have been suspended since April after it failed to disclose its 2018 financial statements; adding to its woes, its auditors Ernst & Young Hua Ming LLP and Ernst & Young resigned. As the bank - which first got in hot water in 2015 over its exposure to the scandal-ridden Hanergy Group - wrote in a filing on the Hong Kong Stock Exchange, E&Y was first appointed as the auditors of the Bank at the last annual general meeting of the Bank held on 29 May 2018 to hold office until the conclusion of the next annual general meeting of the Bank. That never happened, because on 31 May 2019, out of the blue, the board and its audit committee received a letter from EY tendering their resignations as the auditors of the Bank with immediate effect.

６月にZeroHedgeが報告したように、錦州銀行の香港上場株は２０１８年決算開示をしていないために４月以降売買停止状態だ；さらに残念なことに、監査法人、 Ernst & Young Hua Ming LLP and Ernst & Young、は監査を辞退した。当行によると、ーー最初は２０１５年にスキャンダルまみれのHanergy Groupに巻き込まれて煮え湯を飲んだーー香港証券取引所の記録によると、E&Yは当行の監査法人として２０１８年５月２９日に指名されその後一年間の監査を任された。しかしこれはかなわなかった、というのも２０１９年５月３１日、突然、取締役会と監査委員会はEYから直ちに監査法人を辞退するという通告を受け取った。

The reason for the resignation: the bank refused to provide E&Y with documents to confirm the bank's clients were able to service loans, amid indications that the use of proceeds of certain loans granted by the Bank to its institutional customers were not consistent with the purpose stated in their loan documents.

辞退の理由は：当行はE&Yに対して、顧客の返済能力確認試料を提供しなかった、中でもいくつかのローンに関しては当行がその貸し出し資金の使いみちが銀行提供ものと顧客提出のもので食い違っていた。

As a result, "after numerous discussions and as at the date of this announcement, no consensus was reached between the Bank and EY on the Outstanding Matters and the proposed timetable for the completion of audit." At this time, the bank also requested the trading in the H shares (which was frozen on April 1) on The Stock Exchange of Hong Kong Limited to be suspended until the publication of the 2018 Annual Results, which will likely never come.

結果として、「限りない議論の末、この時点で錦州銀行とEYの間で懸案事項を提案された時間内に監査できる合意がなされなかった。」現時点では、錦州銀行は香港証券取引所における売買再開を望んでいる、しかしながらそれがかなえられることはないだろう。

There is another reason why this particular failure is notable: Bank of Jinzhou is the second-most reliant on interbank financing, particularly non-bank financial institutions’ deposits, among more than 200 local banks, according to UBS analyst Jason Bedford said when reached by phone on Thursday.

もう一つこの破綻が重要であるかの理由がある：錦州銀行はインターバンクファイナンスでへの依存度で二番手だ、特にノンバンク金融機関預金、２００を超える地方銀行に依存している、この件をUBSアナリストのJason Bedfordが水曜に電話で答えた。

Which explains its failure: just last month we reported that China's interbank market, especially for smaller banks, had effectively frozen. It was therefore only a matter of time before other banks reliant on it for funding threw in the towel, as Jinzhou has now done. To wit, Jinzhou's Its dollar-denominated loss-absorbing debt instruments, known as AT1 bonds, plunged near all time low...

この破綻を紐解くと：ちょうど先月ZeroHedgeが報告したが、中国のインターバンクマーケットは、特に小規模銀行に対し、実行的に凍結されている。というわけでこの市場に依存する他の銀行がタオルを投げるのはもう時間の問題だった。見てみよう、錦州銀行のドル建て債権、AT1債権と呼ばれるが、これはもう過去最低まで下落している・・・・

... while the bank’s seven negotiable certificates of deposits - which would be taken over by another, bigger bank when (if) the bank is seized and bailed out, were indicated at yields ranging from 3%-5.5% on Thursday, higher than valuations of 2.8%-3.45%.

・・・当行の譲渡性預金７件はーー他行に接収されるだろう、もしもっと大きな銀行が吸収救済をしたときには、この金利は水曜時点で３％ー５．５％だ、査定額の２．８％−３４５％よりも大きい。

Incidentally, back in early June when first reporting on the resignation of the bank's auditors, we said that "the real question facing Beijing now is how quickly will Bank of Jinzhou collapse, how will Beijing and the PBOC react, and what whether the other banks on the list above now suffer a raging bank run, on which will certainly not be confined just to China's small and medium banks."
The answer: less than 2 months.

ちなみに、６月初めを振り返ると、当時監査法人が辞任したときだが、ZeroHedgeはこういった「本当の疑問は、北京政府が直面する問題は、錦州銀行が如何に速く倒産するかではなく、北京政府とPBOCが以下に対応するかだ、そして今やこの表に載っている銀行に怒涛のような銀行倒産が訪れるかどうかだ、それは中国の中小銀行に限定されたものではない。」
その答えは：２か月以内だ。

Unfortunately for China, it won't stop there. As a reminder, China’s smaller lenders have been under growing scrutiny since Baoshang Bank's failure and takeover which led to a sharp repricing of risk for much of China’s banking system which had long operated under an assumption that policy makers would support firms in trouble.

中国にとって残念なことに、これは止まらないだろう。年のために記すと、Baoshang Bankの破綻以来、中国の小規模貸し手は監査を受けており、リスクによる価格見直しがあれている、多くの中国の銀行システムは困ったときには政府が救済するだろうということを前提に運用されてきたからだ。

"We expect the regulators to step up their support if more financial institutions run into liquidity issues,” said Becky Liu, head of China macro strategy at Standard Chartered Plc, who declined to comment directly about Bank of Jinzhou. "Over time, the cost of funding between the stronger and weaker financial institutions will see further divergence."

「さらに金融機関が流動性破綻を示すなら監督当局がさらなる救済をすると期待している、」とBecky Liuは言う、彼はスタンダートチャータードの中国マクロ戦略主任だ、帰れは錦州銀行へのコメントを回避した。「そのうちに、強い銀行と弱い銀行の資金調達コストにさらに大きな乖離がみられるだろう。」