China Rapid Finance Bolsters Governance by Adding Joe Zhang to Board

Acclaimed author and finance expert to serve as an independent non-executive director

SHANGHAI- China Rapid Finance Limited (“CRF” or the “Company”), a leading online consumer lending marketplace, bolstered its commitment to corporate governance, regulatory compliance and transparency with the addition of acclaimed author and financial expert Huaqiao (Joe) Zhang to its board.

“I have strong belief that with its innovative technology and multi data, multi channel strategy, as well as its rigorous risk management practices, China Rapid Finance has unparalleled advantage to thrive in this huge, untapped market.”

Mr. Zhang, 52, who is currently the chairman of Hong Kong-listed China Smartpay, has been appointed as an independent non-executive director on CRF’s board. Previously, he had served as an advisor to the Company since August 2013.

“The addition of Joe Zhang to our board will aid the Company in our aim to grow as a leading consumer lending marketplace that’s focused on strict risk management, transparency, and business innovation,” said Dr. Zane Wang, CEO of the Company.

“I have strong belief that with its innovative technology and multi data, multi channel strategy, as well as its rigorous risk management practices, China Rapid Finance has unparalleled advantage to thrive in this huge, untapped market." Mr. Zhang said. "I'm glad I can join China Rapid Finance to contribute my experience to its promising development in the future."

CRF aims at bringing affordable consumer credit to EMMAs, which are defined as Emerging Middle-class, Mobile Active consumers in China. There are 500 million such people, with quality employment, yet no credit record in the People’s Bank of China, which means they cannot get access to traditional credit service from banks.

Mr. Zhang brings to CRF’s board a wealth of industry knowledge and experience after having spent more than two decades in investment banking and finance. Prior to working at China Smartpay, Mr. Zhang served as the Chairman of Wansui Microcredit Company in Guangzhou from 2011-12. His work was recognized by The Microcredit Association of China, which named Mr. Zhang "Microcredit Person of the Year" in January 2012.

From 2006 to 2008, Mr. Zhang was the chief operating officer of Shenzhen Investment Limited. Earlier, he worked for various investment banks for 15 years, including 11 years with UBS as a banker and head of China Research. While at UBS in 2001, he became well known for publishing research that highlighted the weak governance and financial reporting issues of some companies listed on the Stock Exchange of Hong Kong. From 1986 to 1989, Mr. Zhang worked as a manager at the People's Bank of China.

Mr. Zhang is also the author of the bestseller Inside China's Shadow Banking: The Next Subprime Crisis, which was published in 2013. He has authored numerous articles that have appeared over the past two decades in publications including The New York Times, The Wall Street Journal, Financial Times, Bloomberg and South China Morning Post.

Mr. Zhang received a bachelor’s degree in Economics from Hubei Institute of Economics and Finance, a master’s degree in Economics from the PBOC Finance Institute and a master’s degree in Economics from the Australian National University.

About China Rapid Finance

China Rapid Finance Limited began its operations in 2001, and is the largest online consumer lending marketplace serving China’s emerging middle class in terms of total number of loans. The Company is a recognized innovator with a proprietary Big Data analytics technology platform. The Company has a proven track record in credit risk management and transparency, and has facilitated more than 5 million loans to-date.

The Chinese slowdown and its impact on India

Full immunity from China’s economic slowdown is not something that India can boast about.

China’s changing priorities may see India emerge as an alternative export hub for some products, aided by lower labour costs and its eagerness to become a hub for exports of goods.

China’s slowing economy is a worry for countries that have strong linkages to it. India is fortunate in that it is less vulnerable to economic shocks emanating from China, but it is not entirely ring-fenced either. Much has been written on the moderation in China’s growth, but latest research from the International Monetary Fund (IMF) and the Asian Development Bank (ADB) gauge its impact on the world economy.

The IMF’s working paper China’s Slowdown and Global Financial Market Volatility: Is World Growth Losing Out?finds that a 1% permanent negative Chinese gross domestic product (GDP) shock reduces global growth by 0.23% in the short run. Its slowing economy has a negative effect on the Asean economies (except for the Philippines) and those in the Asia-Pacific (except for India). India is protected most likely due to its weak trade links with China.

The ADB brief based on its report Moderating Growth and Structural Change in the People’s Republic of China: Implications for Developing Asia and Beyond says China’s growth has reduced from 7.3% in 2014 to 6.9% in 2015, and the latest consensus forecasts expect it to decline further to 6.8% in 2016 and 6.6% in 2017. But downward revisions to previous forecasts raise a risk that these may be revised, too.

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The ADB brief says the decline in China’s growth is expected to reduce GDP in the rest of developing Asia by one-third of a percentage point in the next two years. It also maps the effect of China’s slowing economy on commodity prices, finding that a 1% reduction in China’s growth lowers the price of coal, metals and oil and gas (see chart).

This decline in prices has become an indirect risk for India as falling commodity prices pose a risk to significant investments made by firms in metals, mining and oil exploration sectors.

But there is a silver lining. China’s changing priorities may see India emerge as an alternative export hub for some products, aided by lower labour costs and its eagerness to become a hub for exports of goods.

India may appear to be doing fine, relative to some other Asian economies that have been winged by China’s woes. On one factor, however, it remains vulnerable. The IMF paper also assesses how global financial market volatility could arise due to China’s problems. Here, it finds that even commodity importers such as India may find real output falling by an average 0.19% in the first year following the shock. Full immunity from China’s economic slowdown is not something that India can boast about.

Sun Capital

Deutsche Bank chief scotches India unit sale speculation

MUMBAI: Deutsche Bank quelled speculation about its future in India as well as Asia and said it aims to build on one of the most profitable franchises amid global reorganisation that is leading to some businesses shrinking for it to remain profitable.

"Deutsche Bank India sale was never ever on the table,''Gunit Chadha, chief executive officer of Deutsche Bank in Asia Pacific, told ET in an interview. "We have significant businesses in Japan, China, India, Australia, Hong Kong,ASEAN & Singapore.

Deutsche Bank

The global banking industry must reinvent its business models. We ourselves have some challenges which we are proactively addressing, but our commitment to Asia Pacific is strong and stays fully intact."

The German bank which was cleared by the regulators in a rate rigging probe is reorganising itself by cutting staff and exiting markets which are unviable.In this context, some speculated that Deutsche may sell its India unit as the region itself could become a non-core area. In fact, the bank had to face some toughmarket conditions recently after analysts questioned its ability to pay interest on some bonds. But the bank has since reassured investors with a bond buyback plan. Its CEO John Cryan said that bank is 'absolutely rock solid.'

"Asia Pacific is our strong growth region," said Chadha. "This is no surprise as Deutsche Bank Asia Pacific PBT has doubled between 2012 to 2015 with very attractive financial metrics and the region now has five of the top 10 countries for Deutsche Bank globally." About 12% of its revenues (4 billion) came from the Asia-Pacific region. It mostly does corporate and investment banking in the region with India alone having a retail business. Deutsche Bank has 17 branches in India currently with around.`5,000 crore mortgage book and.`15,000 crore in wealth management.

Last year it sold its mutual fund business to Pramerica Mutual Fund.

In October 2015, the bank announced that it will shut operations in 10 countries globally, cutting 15,000 full and part time jobs as part of the bank's 'Strategy 2020' which aims to reduce costs, lower risks and improve Deutsche Bank's capital position after being weighed down by fines linked to the LIBOR fixing scandal.

Chadha said the bank recently sold its mutual fund business in India because it was "sub scale and largely domestic". It was less than 2-3% of the DB India profits. While being consistently profitable and well managed, it needed to scale up.

But the same need not be true of its retail business in India even though it does not contribute significantly to overall profits.

"I don't believe that our Indian retail business will be shrunk to glory," said Chadha. "Either you are in the retail business or not. If one is in the business it needs to scale up. Deutsche Bank's retail business is not about becoming leaner. It's a well-managed profitable business for us. Yet as India is the only market in Asia where we have a retail business , the strategic forward naturally comes up."

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