Sunday, Sep 23, 2018
Finance | Asia-Pacific | Macau

Financially bridging East and West

6 years ago

Macau’s banks hold an extremely low non-performing loan ratio of 0.4%
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Macau might be best known for its many casinos, but the SAR is rapidly becoming a regional financial center as well

The Special Administrative Region is home to 28 banks, as well as several small financial services boutiques and a number of life- and non-life insurance companies.

Banking and financial services account for about 10% of the city’s gross domestic product. This figure can be expected to grow as the economy diversifies and Macau’s banks expand into a bigger role as a bridge between China and the Portuguese-speaking countries in which they’re increasingly investing.

“Macau is in a unique position because it is part of China, but Macau knows Portuguese culture,” says Jorge Ferro Riberio, co-Chairman of Geocapital, a Macau-based investment company that helps unite Chinese capital with projects in Portuguese-speaking countries.

“Portuguese culture was present in all these countries, including Mozambique and Angola,” Mr. Riberio explains. “So it is absolutely right to use Macau as a platform to increase cooperation between China and these countries.”

Macau’s financial industry has achieved sustained growth in recent years while at the same time maintaining a safe and stable record of regulation and supervision. The Monetary Authority of Macau (AMCM), has made sure of that, overseeing the sector since it was established in 1989.

The Financial System Act, which was approved in 1993, introduced reforms that focused on preventive measures and extensive monitoring of financial entities under the AMCM’s supervision. The FSA implanted rules established by the Basel Committee on Banking Supervision and helped make sure Macau’s bank’s are rock-solid and able to pass any stress test of their strength.

“The Macau banking sector, in the midst of overall economic recovery, scored results with flying colors again, which laid down solid foundation in the realization of our long-term sustainable development,” says AMCM Chairman Anselmo Teng.

Partly thanks to the AMCM’s steady supervisory hand, Macau’s banking sector had excellent results in recent years. In 2010, total assets managed by banks increased 26.5%, to 540 billion Macau Pataca ($68 billion), with an extremely low non-performing loan ratio of 0.4% and a capital adequacy ration of 15.3%, well above levels required by international banking standards.

Not long after a time when many banks around the world were teetering on the edge of collapse – and in Europe where some still are – it’s good to know that Macau’s financial institutions, regulated and guided by the AMCM, are in excellent shape and ready to continue their recent strong pace of expansion.




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