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Morning Briefing

Morning Briefing

The deputy governor of Nigeria's central bank in charge of economic policy, Mrs Sarah Alade, has said the country's banks are among the most regulated in the world and that the era of bank failure is over.

Mrs Alade dismissed concerns that JPMorgan's delisting of Nigeria's bonds would lead to banks collapsing. "JPMorgan is just an international bank, well respected but has an axe to grind with this country because the authority has refused to further devalue the naira," she said.

Major banks in the USA have warned of inevitable cost cuts as a consequence of the Fed's decision to stick with near-zero interest rates on Thursday.

Bank of America's CEO, Brian Moynihan, said the bank would have to double down on ongoing efforts to reduce expenses if rates don't rise. "Let me assure you, if the revenue environment weakens or interest-rate structures don't move up and the economy slows down, we'll have to take out more costs," he said.

And US Bancorp CEO, Richard Davis announced cost-cutting plans; allowing him to "care less" about interest rates.

HSBC's chairman, Douglas Flint, has hinted that the bank could remain UK-based as the regulatory environment there suits a global bank, particularly as he expects that China's volatile stock market situation could lead to another Black Monday crash.

"Regulatory regimes reflect their constituents, and most markets outside the UK, US and EU are essentially regional as the banks there are domestic or are subsidiaries of international banks," he said in a lecture at Cass Business School in London. "There is a common platform of rules under Basel, but the application is domestic. London has the biggest concentration of international banks and is one of the two largest financial centres in the world, and the regulatory expertise here reflects that need."

In other UK news, the country's challenger banks face a challenger of their own from today following the UK launch of German digital bank Fidor. Fidor has been signing up community members to a website since April and is launching its first products — a savings bond and money transfer services — today.

In Malaysia, Maybank is aiming to become the market leader in SME financing having grown the business by over 31 percent for two years in a row.

"Our current market share for SME retail financing currently stands at 21 percent as of the end of last year and we expect this to grow to between 24 and 26 percent within the next two years," group head of community financial services, Datuk Lim Hong Tat, said.

In India, RGVN (North East) Microfinance Limited, one of the microfinance companies that this week received in-principle approval from the central bank to operate as a small finance bank, has said it aims to have 250 branches by 2020.

"We are happy to have been selected in this august list as we are much smaller compared to the other selected organisations," Rupali Kalita, the company's managing told the Telegraph. "We have been given 18 months to complete all the formalities required by the RBI. So, in effect, the bank will be operational by March 2017," she said.

Meanwhile, the downside of failing to be selected for a licence has become apparent for SKS Microfinance, with shares in the company plunging by as much as 20 percent after its application failed to get the nod from the central bank.

Australian no-interest lender Good Shepherd has said that payday lenders and consumer goods rental companies should be forced to refer poor customers to it if they seek loans for essential items, according to the Sydney Morning Herald.

Good Shepherd's chief executive, Adam Mooney, told assistant treasurer, Josh Frydenberg, and Minister for Human Services, Senator Marise Payne, that caps that apply to payday loans should also apply to consumer leases during a discussion on how to get more people to choose low-cost banking.

"We will be recommending that where a client presents to a small amount lender or lease provider that has a Centrelink [social welfare] income there be an obligation to refer that client to a [no interest lender] if that item is essential to their survival, safety or resilience," Mr Mooney said.

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