Asia Roundup
Why China Took Over Zhongbang Bank
Years of aggressive expansion and flawed corporate governance have laid bare fresh vulnerabilities in China’s banking system, prompting regulators to step in to rescue an underperforming regional player, South China Morning Post reported.
Zhongbang Bank, a lender in central China’s Hubei province mired in a credit crisis, has become the latest to force Beijing into action amid official clean-up efforts to create a healthy banking system.
The National Financial Regulatory Administration (NFRA) announced that it would take over Wuhan-based private lender Zhongbang Bank, citing grave credit risks.
Malaysia’s Low Unemployment Masks Deeper Crisis of Underemployed Graduates
Malaysia’s unemployment rate stayed at an 11-year low of 2.9% for five months from November 2025, before inching up to 3% in April, government data showed. But economists told the Straits Times that the headline figure masks a deeper problem: underemployment.
Some 2.06 million people in Malaysia were in skill-related underemployment in 2024, a figure that is on an upward trend, affecting 36% of tertiary-educated employed people, according to the government’s 2026 Labour Force Statistics.
This includes graduates and skilled workers who are employed, but in jobs that do not fully utilise their education, training or capabilities.
Moody’s Warns Asia-Pacific Private Credit Expansion to Slow
Growth in private credit fundraising and deployment in the Asia Pacific will slow over the next 12 to 18 months as macroeconomic uncertainty, geopolitical tensions, and elevated interest rates weigh on investor appetite for illiquid assets, Bloomberg reported, citing Moody’s Ratings.
Redemption requests that have hit global private credit funds have resulted in greater scrutiny of liquidity terms and may temper incremental inflows into the APAC region, especially from retail and wealth channels.
Still, fundamental demand for private credit in APAC should remain robust, underpinned by economic expansion and bank retrenchment from riskier and capital intensive lending.
Indonesia Roundup
‘Payback Time’: Indonesia’s ‘Dragons’ versus the President
Prabowo’s confrontational approach – in sharp contrast to the cordial ties of previous presidents – is rattling the business elites who for generations have controlled key industries including mining, palm oil, retail and construction, The Financial Times reported.
The relationship between the tycoons and the presidential palace was the worst they have ever been under any president, said an adviser to one of the country’s richest families.
Some of the tycoons are already delaying investments or considering deploying capital overseas, according to interviews with advisers to four different tycoons. Some were forgoing bidding for government contracts in an effort to avoid scrutiny.
Acrostics Asia wrote on 1 February 2026:
Some conglomerates have refrained from committing to major domestic investments partly because of worries about asset seizures and other forms of state crackdown…The pressure on state-owned banks and business tycoons to step up their national service may create a chilling effect that restricts flows to the broader economy.
Indonesia’s 2026 Budget Deficit Outlook Seen at 2.85% of GDP
Indonesia’s budget deficit is expected to widen to 2.85% of GDP this year, bigger than originally predicted, even as the government aims to scale back spending on the president’s flagship school meals program, Reuters reported via The Business Times.
The new estimate, which is close to the legislated deficit ceiling of 3% of GDP, was released by Said Abdullah, the head of parliament’s budget commission, at the start of a hearing with the finance ministry. It is wider than both the government’s previous estimate of a deficit of 2.68% this year and the 2025 budget gap of 2.81% of GDP.
Acrostics Asia is an independent credit intelligence provider that connects the dots across Asian sovereigns, private credit and restructurings.