Anselmo Teng: Abundant opportunities for the MSAR financial sector
Speech by Mr Anselmo Teng, Chairman of the Monetary Authority of Macao, at the 2014
Spring Cocktail Reception of the Monetary Authority of Macao, Macao, 17 March 2014.
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Honourable Secretary for Economy and Finance, Mr. Tam Pak Yuen,
Honourable Director-General, Economic Affairs Department of the Liaison Office of the
Central People's Government in the Macau Special Administrative Region (MSAR),
Mr. Wang Xindong,
Honourable Counselor, the Office of the Commissioner of the Ministry of Foreign Affairs in
the MSAR, Mr. Nie Quan,
Distinguished guests from the financial industry, media friends, and colleagues,
While the dancing Snake goes to praise merits, the galloping Horse comes to deliver good
news. Today, practitioners of the Macao financial industry gather to celebrate the new spring
season. First of all, on behalf of the AMCM, I wish everyone a successful and healthy New
Year of the Horse! We are honoured to have the Secretary for Economy and Finance,
Mr. Tam Pak Yuen, with us. On behalf of the AMCM, I would like to express our sincere
gratitude to Secretary Tam for his presence in our reception, his continuous guidance to the
AMCM, and his support for the development of the financial sector! At the same time, I
welcome our guests, especially, Director-General, Economic Affairs Department of the
Liaison Office of the Central People's Government in the MSAR, Mr. Wang Xindong;
Director-General, the Office of the Commissioner of the Ministry of Foreign Affairs in the
MSAR, Mr. Nie Quan; and practitioners from the local financial industry.
Over the past year, under the auspices of the Central Government, with the guidance
provided by the MSAR Government to assiduously pursue appropriate economic
diversification and the joint efforts of all stakeholders, the MSAR economy achieved new
highs in many aspects. The financial industry actively contributed in the process while it itself
also flourished in such a favourable economic environment.
At end-2013, total assets of the banking system reached MOP990.1 billion, a year-on-year
increase of 24.4%; total deposits stood at MOP680.1 billion, a rise of 25.8% over a year
earlier; total loans amounted to MOP534.7 billion, a year-on-year increase of 31.4%. For the
whole year of 2013, profits after tax reached MOP7.5 billion, a rise of 31.5% over a year
earlier. While the scale of assets continued to expand, all prudential supervisory indicators
stayed at healthy levels: the non-performing loan (NPL) ratio at 0.09%; the capital adequacy
ratio (CAR) at 14.8%, within which the tier-one capital ratio stood at 11.2%; the one-month
and three-month liquidity ratios were reported at 52.3% and 66.0% respectively. Renminbi
(RMB) businesses of local banks also registered notable growth. At end-2013, RMB deposits
amounted to RMB85.8 billion, which represented an annual rise of about 110.0% while the
cross-border RMB trade settlement business hit RMB149.2 billion, a year-on-year increase of
53.5%.
As regards insurance business, the total gross premium reached MOP6.8 billion in 2013, a
year-on-year rise of 25.5%. Within this total, the life insurance premium stood at
MOP5.0 billion, an annual increase of 32.8%, while the non-life insurance premium reached
MOP1.8 billion, a year-on-year increase of 9.3%.
To uphold financial safety and stability in the MSAR, the AMCM continued to supervise
authorised institutions on an on-going basis through offsite surveillance, onsite examinations
and thematic reviews. In order to promote sustainable development of the local financial
sector and to cope with enhancing international financial supervisory requirements,
regulatory regimes and financial infrastructure in the MSAR have continuously been refined.
With regard to regulatory framework, on the banking front, the "Guideline on Disclosure of
Financial Information" was made effective in 2013 in order to fulfil the requirement for market
disciplines laid down by Basel II. For the revision of credit risk-weighted capital adequacy
requirements, the AMCM kicked off a consultation with practitioners and a quantitative
impact study. To strengthen the security of automatic teller machines (ATMs) and bank
cards, the AMCM issued the "Requirements for Automatic Teller Machine and Bank Card
Security". In particular, in the light of financial-market developments and enhancing
international supervisory requirements, the AMCM has been conducting a comprehensive
review of the "Financial System Act" (FSA) through concluding past regulatory experiences
as well as making references to international regulatory standards and supervisory regimes
in other jurisdictions. As regards insurance supervision in the year under review, progress
was made in the revision of some articles contained in the legal framework for employees'
compensation insurance, which has entered into the legislative stage. Furthermore, after
prior consultation with the industry, "Guidelines on Corporate Governance of Authorised
Insurers" was promulgated and became effective in January 2014.
On financial infrastructure, the launch of MOP Real Time Gross Settlement (RTGS) system
in January 2013 was a milestone in the modernisation and digitalisation of the MSAR
payment system. With the aim to achieve convenient, efficient and stable cross-border
capital flows, we are working on expanding capacity to deal with other currencies at this
stage so as to prepare for connection with neighbouring jurisdictions' payment systems.
The Exchange Reserve and Fiscal Reserve are important components of the public financial
resources of the MSAR. As these two reserves serve different statutory and policy functions,
the AMCM has all along followed relevant legal requirements and international standards,
upholding the principles of safety, stability and prudence in managing these reserves. Taking
into account various internal and external factors, including the global political, economic and
investment environments as well as financial market dynamics, the AMCM has stricken a
reasonable balance of risks while carrying out appropriate diversification of asset allocation.
At end-2013, the Exchange Reserve stood at MOP129.0 billion, while the Fiscal Reserve
amounted to MOP168.9 billion.
As regards regional financial cooperation, with the gradual implementation of the "Framework
Agreement on Cooperation between Guangdong and Macao", financial cooperation between
Guangdong and Macao has been deepened and broadened with steady concrete results and
progresses. In 2013, in addition to existing cooperation mechanisms such as "the Financial
Cooperation Meeting between Guangdong and Macao" and "the Working Group on Financial
Cooperation between Guangdong and Macao", Zhuhai and Macao also established a
Steering Group and a Working Group on Financial Cooperation between Zhuhai and Macao,
and a Working Group on Coordinating Financial Policies between Zhuhai (Hengqin) and
Macao to strengthen the financial cooperation, including financial innovation in Hengqin.
These initiatives serve to enhance communications and realise financial cooperation in a
gradual fashion. Meanwhile, in accordance with the "Memorandum of Understanding (MOU)
on Financial Cooperation between Shanghai and Macao" signed between the AMCM and the
Financial Services Office of the Municipal Government of Shanghai in 2012, the
"1st Financial Cooperation Meeting between Shanghai and Macao" took place in Shanghai in
2013. During the meeting, consensus on various issues was reached and expected results
were achieved, including the proper use of Macao as a trade and commerce platform
between Mainland China and Portuguese-speaking countries (PSCs).
As far as we recognise, the MSAR financial sector has entered into a stage where
opportunities are abundant. In the current situation, I believe that the local financial sector
should look at it from a broader perspective, think more innovatively, make full use of various
policy initiatives, try actively and seize the opportunities. On the basis of maintaining a
reasonably prudent balance between business development and risk management, the local
financial sector could reach new highs in the future, while making greater contribution to
appropriate economic diversification.
Finally, on behalf of the AMCM, I wish the MSAR continuous prosperity and stability,
Macao's financial sector steady development, everyone a prosperous Year of the Horse,
good health and a happy family! Thank you very much!