Japan regulatory head scolds weak regional banks: ‘Don’t blame BOJ’

Japan’s roughly 100 regional banks are grappling with diminishing returns from their traditional lending business. (AFP)
Updated 22 August 2018
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Japan regulatory head scolds weak regional banks: ‘Don’t blame BOJ’

  • A shrinking population outside Japan’s biggest cities is hurting business
  • Regional banks’ combined core profits totaled ¥1.2 trillion ($10.9 billion) in the year ended in March, data compiled by FSA shows

TOKYO: Japan’s top financial regulator said regional banks “should not blame the Bank of Japan” for their woes, urging them to explore ways to survive ultra-low interest rates.
“They should not just sit and wait for the BOJ to change its policy. Will everything be alright if it seeks exit and normalizes interest rates? I don’t think so,” Toshihide Endo, commissioner of the Financial Services Agency (FSA), told Reuters in an interview on Wednesday.
The comments come as many of Japan’s roughly 100 regional banks grapple with diminishing returns from their traditional lending business, hit by a low interest rate environment amid the BOJ’s ultra-loose monetary policy.
A shrinking population outside Japan’s biggest cities is also hurting business.
Regional banks’ combined core profits totaled ¥1.2 trillion ($10.9 billion) in the year ended in March, data compiled by FSA shows, down 30 percent from five years earlier, just before the central bank launched aggressive monetary easing.
Endo, who became FSA chief in July, said managements at some regional banks needed to get their act together, warning that they were “not considering seriously” how to build a sustainable business model despite the industry’s gloomy prospects.
“We have been telling them to consider action and make judgments on their own, not just because we tell them to do so,” he said.
Endo said FSA is not urging consolidation among regional banks, emphasizing it is up to the management of each lender to decide on options to survive.
At the same time, Endo said there have been some mergers that made him doubt managements’ seriousness. “Some rival banks got together under a holding company just for the sake of a non-aggression pact. I don’t see the point of it,” he said.
Endo, 59, joined the finance ministry in 1982. From 2015 until last month, he oversaw the country’s financial firms at the FSA’s supervisory bureau. Before that, he ran its inspection bureau.
On cryptocurrency exchanges, he said the FSA was trying to strike a balance between protecting consumers and promoting technological innovation.
Japan last year became the first country to regulate cryptocurrency exchanges, as it tries to encourage technological innovation while ensuring consumer protection.
The FSA took a tougher stance toward the industry after the $530 million theft of digital money from Tokyo-based Coincheck Inc. in January.
FSA inspections found sloppy management at many of the exchanges, saying they lacked basic internal controls to protect users and prevent money laundering. As a result, some exchanges were ordered to temporarily suspend operations.
“We have no intention to curb (the crypto industry) excessively,” he said. “We would like to see it grow under appropriate regulation.”


Apple China says it will push software update in bid to resolve Qualcomm case

Updated 49 min 32 sec ago
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Apple China says it will push software update in bid to resolve Qualcomm case

  • Apple will carry out the software updates at the start of next week to address the concern
  • A court found Apple infringed two patents held by the chipmaker and banned sales of older iPhone models

SHANGHAI/SAN FRANCISCO: Apple Inc. , facing a court ban in China on some of its iPhone models over alleged infringement of Qualcomm Inc. patents, said on Friday it will push software updates to users in a bid to resolve potential issues.
Apple will carry out the software updates at the start of next week “to address any possible concern about our compliance with the order,” the firm said in a statement sent to Reuters.
Earlier this week, Qualcomm said a Chinese court had ordered a ban on sales of some older Apple iPhone models for violating two of its patents, though intellectual property lawyers said the ban would still likely take time to enforce.
“Based on the iPhone models we offer today in China, we believe we are in compliance,” Apple said.
“Early next week we will deliver a software update for iPhone users in China addressing the minor functionality of the two patents at issue in the case.”
The case, brought by Qualcomm, is part of a global patent dispute between the two US companies that includes dozens of lawsuits. It creates uncertainty over Apple’s business in one of its biggest markets at a time when concerns over waning demand for new iPhones are battering its shares.
Qualcomm has said that the Fuzhou Intermediate People’s Court in China found Apple infringed two patents held by the chipmaker and ordered an immediate ban on sales of older iPhone models, from the 6S through the X.
Apple has said that all of its phone models remained on sale in mainland China and that it had filed a request for reconsideration with the court. All the models appeared to be available to buy on Apple’s China website on Friday.
Qualcomm, the biggest supplier of chips for mobile phones, filed its case in China in late 2017, arguing that Apple infringed patents on features related to resizing photographs and managing apps on a touch screen.