Anselmo Teng: Overview of Macao's 2012 financial sector development
Address by Mr Anselmo Teng, Chairman of the Monetary Authority of Macao, at the Spring
Cocktail Reception of the Monetary Authority of Macao, Macao, 18 March 2013.
* * *
The Honourable Secretary for Economy and Finance, Mr. Tam Pak Yuen,
The Honourable Deputy Director General, Economic Affairs Department of the Liaison Office
of the Central People's Government in the MSAR, Mr. Kou Ming,
The Honourable Deputy Director-General of the Office of the Commissioner of the Ministry of
Foreign Affairs in the MSAR, Ms. Ji Ziyuan,
Dear Guests, Practitioners of the Financial Sector, Friends of the Media, Colleagues,
"The Dragon goes back to the sea and bids farewell to the old calendar. The Golden Snake
is clad in colours to greet the new Spring." At this moment, flowers bloom in the warm March
air, we gather together again to bid farewell to the Year of the Dragon and greet the Year of
Snake in the midst of well wishes. We are honoured to have the presence of Mr. Tam Pak
Yuen, Secretary for Economy and Finance to officiate this Spring Cocktail Reception. As
such, I would like to express, on behalf of the Monetary Authority of Macao, our candid
gratitude to Mr. Tam for squeezing out some time from his tight schedule to come to this
function. At the same time, I would like to extend our warmest welcome to our guests,
particularly Mr. Kou Ming of the Liaison Office, and Ms. Ji Ziyuan of the Ministry of Foreign
Affairs.
In the past year, the international economic and financial status was still unstable. The shock
arising from the international financial crisis remained unsettled. The negative impacts of the
European debt crisis and the U.S. "fiscal cliff" continued to ferment. Major economic entities
adopted loose monetary policies consecutively. Coupled with the problems and threats
triggered by other geopolitical factors, the global financial situation was further complicated
and looked opaque. Under the interaction of all risks, global economic recovery was
moribund. The economic entities of major developed nations had anaemic growth.
Recession loomed in Eurozone.
Under such an uncertain global economic and political environment, the MSAR Government
insisted on promoting appropriate economic diversification. Through continued deepening of
regional cooperation and the locomotive effect of the thriving tourism services industry,
satisfactory growth was achieved by its overall economy, which laid down solid foundation for
the MSAR to stave away economic turmoils. At the same time, under the coordinated
endeavour of all sectors of the community, our financial industry realized steady growth and
scored flying colours. It has never been better.
As at the end of 2012, total assets of the banking system reached MOP796.2 billion, a
yearon-year increase of 21%; total deposits stood at MOP554.2 billion, a year-on-year increase
of 32.7%; total loans amounted to MOP407 billion, a year-on-year increase of 26.2%; capital
adequacy ratio was 14.6%, basically core capital. Asset quality was fine, non-performing
assets ratio was only 0.19%. Profits of the banking system amounted to MOP5.7 billion, a
year-on-year increase of 25%. As per the end of 2012, RMB deposits in Macao reached
RMB41.63 billion while cross-border RMB trade settlement business amounted to
RMB97.25 billion, a year-on-year increase of 62%.
The insurance industry is an important component of the Macao financial industry. As at end
2012, total insurance premium receipts amounted to MOP5.38 billion, a year-on-year increase
of 24%; of which life-related receipts amounted to MOP3.73 billion, a year-on-year increase of
19%; while non-life receipts were MOP1.65 billion, a year-on-year increase of 36%.
On the issue of supervisory duty as a whole, AMCM in 2012 continued its supervision on
authorized institutions via measures such as onsite inspection, offsite surveillance, theme
inspection and study, cross-border cooperation supervision. Moreover, it established regular
meeting mechanism with relevant trade associations to strengthen information exchange and
risk surveillance communication which enhanced the function of self-regulation on the part of
the trades concerned.
On the banking supervision front, to ensure that banks will maintain prudent operation in an
ever changing environment through appropriate internal control and risk management,
AMCM continued its supervision on banks operating in Macao. Simultaneously, it postulated
and amended suitable and timely supervisory requirements and arrangements in line with
international prudent supervisory standards and principles in accordance with the practical
needs and conditions of Macao. These included the step-by-step implementation of the "New
Capital Accord" II/III of the Basel Committee on Banking Supervision. The "Guideline on
Financial Information Disclosure" was promulgated to enhance the requirement for banks to
disclose information. In response to the implementation of the Pataca Real Time Gross
Settlement System, the "Rules for Cash in Hand and Minimum Solvency" was amended.
In the supervision of the insurance industry, inspections were carried out according to annual
plan. Simultaneously, AMCM finalized thematic onsite inspections of AML and CFT on life
insurance institutions operating in Macao. At the same time, AMCM amended the existing
supervisory legislations and guidelines, mainly related to supplements to the provisions of
the "Macau Insurance Ordinance" and "Insurance Agents & Brokers Ordinance". Moreover,
drafting of amendments to the legislations relating to employees' compensations, and
guidelines which included corporate governance were carried out.
In the management of Fiscal Reserve of the SAR and Exchange Reserves, following the
legislation of the creation of the new SAR Fiscal Reserve System which became effective at
the beginning of 2012, AMCM takes into consideration the legal provisions relating to basic
and excess reserve and the tolerance of acceptable risks to secure commensurate returns.
Moreover, AMCM has been endeavouring to perfect investment management and widen
investment channel, including the execution of the "China (Mainland) Interbank Bond Market
Investment Agency Agreement" with the People's Bank of China in March last year. Besides,
AMCM continues to listen to the community, particularly the Fiscal Reserve Advisory
Committee, all relevant advices; and will increase, as appropriate, the proportion of riskier
assets in the portfolio in the expectation of a higher return. As at end February 2013, Fiscal
Reserve stood at MOP164.3 billion while FX Reserves amounted to MOP132.6 billion.
In financial infrastructure construction, AMCM continues improvement and enhancement of
the systems which are in operation. It also develops new systems so as to enhance
management and service. The Pataca Real Time Gross Settlement System (RTGS) was
developed and was formally in operation at the beginning of 2013. The RTGS provides highly
efficient and modern payment settlement service to the market and it is expected that it will
provide impetus to upgrade the Macao financial industry.
In the disclosure of financial statistics and data, AMCM makes use of the vehicle "Monetary
and Financial Stability Review", which is compiled and published at regular intervals, to
conduct thematic research on the supervision of monetary and financial stability in order to
strengthen surveillance on cross-border fund movements arising from international balance
of payment of the SAR, which can enhance our ability in detecting and preventing financial
hazards. On the other hand, according to the most up-to-date request of international
organizations, we keep on revamping the method of compiling the monetary and financial
data of the SAR. A study has been started to shorten the intervals between the publication of
financial data of all kinds of currencies conducive to financial market development, risk
control requirements and the timelines of the release of such statistical information.
All along, AMCM has been promoting our financial sector to participate in regional financial
cooperation and communication programmes. In 2012, the 14th "Guangdong-Macao
Financial Cooperation Meeting" and the "12th Quadripartite Meeting of Insurance Regulators
of Guangdong-Hong Kong-Macao-Shenzhen" were successfully held in Macao.
Simultaneously, AMCM coordinated with the Office of Financial Services of Guangdong
Province and other financial regulatory institutions in Guangdong to found the
"GuangdongMacao Financial Cooperation Task Force" which convened two meetings in the year to
gradually implement the "Guangdong-Macao Cooperation Framework Agreement" to deal
with matters relating to financial cooperation. In January 2012, the Shanghai People's
Government Financial Delegation led by the Vice-Mayor, Mr. Tu Guangshao visited AMCM.
Consensus was arrived at in promoting financial cooperation between the two regions. In
June, under the witness of Mr. Tam Pak Yuen, Secretary for Economy and Finance, and Mr.
Tu Guangshao, Vice-Mayor of the Shanghai People's Government, AMCM executed the
"Shanghai-Macao Financial Cooperation Agreement" with the Financial Services Office of
Shanghai, with a view to promoting financial cooperation and development between the two
regions.
On the other hand, AMCM is proactively promoting liaison between China and Portuguese
speaking countries. In October last year, AMCM organized a financial forum with the main
theme "Exploit Macao's Platform Function to Promote Economic and Commercial
Development between China and Portuguese Speaking Countries", which was participated
by governors of central banks of some Portuguese speaking countries. They had a candid
communication with the representatives of the Shanghai Financial Services Office and the
Office of Financial Services of Guangdong Province on how to strengthen economic,
commercial and financial relationship by making use of the platform function of the MSAR. In
November, representatives of AMCM participated in the 22nd "Lisbon Meeting" held in
Lisbon, Portugal. Our attendees made use of the opportunity to enhance mutual
understanding and information exchange.
AMCM has achieved fruitful results last year as aforementioned. We are grateful to the
Secretary for Economy and Finance, for his wholehearted support and guidance and we
have had the care and coordination of the Liaison Office of the Central People's Government
in the MSAR, the Office of Commissioner of the Ministry of Foreign Affairs in the MSAR, all
government agencies, the financial sector and the community. It goes without saying that the
efforts and hard works of our colleagues are indispensable. I would like to take this
opportunity, on behalf of the AMCM Board of Directors, to express our candid appreciation.
At the moment, international financial conditions show signs of recovery. However, hidden
elements of uncertainty are still around. We shall keep a watchful eye and stay vigilant to
deal with changes arising from external environment which may inflict risks and impact on
our economy and financial system. Through further deepening of the regional financial
cooperation with Guangdong Province, there is an increasing space for development for our
financial industry. I believe that our practitioners will grasp the opportunity to exploit the
competitive edge of their institutions and Macao to realize organic growth with a view to
contributing to the continued stability of our financial industry conducive to the appropriate
economic diversification of Macao.
Finally, let us toast to the burgeoning prosperity of our Motherland and the MSAR! The
Macao financial industry will continue its steady development! At the same time, we wish
every guest health and wishes come true.
Thank you.