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Morning Briefing

Morning Briefing

The IPOs of Japan Post and its two subsidiaries, Japan Post Bank and Japan Post Insurance, are already up to five times oversubscribed although they are not due to be listed until 4 November.

After just one week of book-building the insurance arm is proving to be the most attractive to the individual investors that are being targeted. It is 5.6 times oversubscribed while the bank and holdings company are each 1.5 times oversubscribed.

JPMorgan, the largest bank in the US, is getting smaller and, to some extent, is doing so deliberately. In third-quarter results reported yesterday, the bank revealed that its assets declined by $160 million as it moved to simplify its business in the face of new capital regulations.

The $160 billion assets shrinkage in the six months ended 30 September represents a six percent drop — the highest decline since 2009. Revenue fell 6.9 percent to $22.78 billion.

The Indian government's Jan Dhan Yojana financial inclusion scheme is fighting back. Jan Dhan Yojana, whereby previously unbanked people could open basic savings accounts with a zero balance, launched last year and was initially considered a great success with the opening of 115 million accounts — until analysis showed that 70 percent of them had zero balance. Now, however, that figure is under 40 percent and deposits have exceeded $3.8 billion, according to the finance ministry.

The Hong Kong Monetary Authority is reported to have ordered seven banks to stop issuing contactless-enabled credit cards due to security concerns. Bank of China (HK), DBS Bank (HK), Bank of Communications (HK), China CITIC Bank International, Industrial and Commercial Bank of China (Asia), Dah Sing Bank and Wing Lung Bank were also instructed to notify existing cardholders about the security risks, recall problematic cards and offer replacement cards.

The UK could be set to get a new retail bank next year after specialist mortgage company Masthaven applied to the Bank of England for a licence to operate as a retail bank with a digital focus.

In an attempt to limit widespread cash use in Ireland, the government has introduced a new tax, of €0.12, on ATM cash withdrawals using debit cards.

Swiss watchmaker Swatch is taking on Apple in the Chinese market with the launch of a 600 yuan ($95) payments-enabled timepiece called the Swatch Bellamy. Although it doesn't connect to the internet, the watch includes a payments chip. In launching the watch, Swatch partnered with China UnionPay and Bank of Communications.

In Australia, Westpac has blinked first and hiked mortgage rates — a move that is expected to be followed by other lenders in the market and that could put pressure on the central bank to cut the official cash rate. Westpac's chief executive, Brian Hartzer, said the 20 basis points increase in variable rates was a difficult decision that had not been taken lightly. "The magnitude of regulatory capital increases and their short implementation timetable has an inevitable impact in our pricing," he said.

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