Westpac plans A$3.5B buyback post-earnings; China tightens rules for top lenders

TOP NEWS IN BANKING & FINANCIAL SERVICES

* Westpac Banking Corp.'s cash earnings for the fiscal year ended Sept. 30 grew 105% year over year to A$5.35 billion from A$2.61 billion. The lender also disclosed plans for an off-market buyback of up to A$3.5 billion ordinary shares within a month to Dec. 17 to boost its capital position in preparation for uncertainties, as well as to have the capacity to support its growth and its customers.

* China's top four lenders, which were identified as systemically important banks globally, will be subjected to higher total loss-absorbing capacity requirements to improve their risk-disposal mechanism, control irrational business expansion and curb the accumulation of systemic risks, the People's Bank of China, China Banking and Insurance Regulatory Commission and Ministry of Finance said in a joint statement.

Under the new rules, Industrial & Commercial Bank of China Ltd., Agricultural Bank of China Ltd., Bank of China Ltd. and China Construction Bank Corp. must have total loss-absorbing capacity equivalent to 16% of their risk-weighted assets starting Jan. 1, 2025, and 18% beginning Jan. 1, 2028, Reuters reported, citing the joint statement.

➤ Nomura beefs up risk control after surprise provision on legacy US deals

The latest ¥39 billion provision, which Nomura said was related to legacy transactions in the U.S. from before the global financial crisis in 2007 and 2008, caused the company's net profit to fall 95% in the September-end quarter.

➤ China green bond market breaks record with policy push, offshore interest

The world's second-largest economy raised $63.16 billion in green debt locally and offshore in the first nine months of this year, after record issuance totaling $25.06 billion in the third quarter, according to Climate Bonds Initiative.

EARNINGS SPOTLIGHT

* Industrial & Commercial Bank of China Ltd., the world's largest bank by assets, logged a 10.59% year-over-year growth in net profit attributable to equity holders of its parent in the quarter ended Sept. 30. Net profit for the three-month period climbed to 88.35 billion yuan from 79.89 billion yuan, while its interest income jumped to 294.67 billion yuan from 273.83 billion yuan.

* During the same quarter, China Construction Bank's net profit attributable to shareholders increased 15.61% year over year to 78.85 billion yuan, while Bank of China reported a 13.21% year-over-rise in net profit to 50.71 billion yuan. Bank of Communications Co. Ltd.'s net profit also climbed 37.85% to 22.34 billion yuan.

BANKING

* Japan's Hokkoku Financial Holdings Inc. plans to remove 125 offsite ATMs of The Hokkoku Bank Ltd. by September 2024 as part of its transition to cashless banking.

* Japan Bank for International Cooperation established a green bond framework and plans to launch a green bond program for the first time.

* Thailand's Kasikornbank PCL plans to invest between 100 billion baht and 200 billion baht over the next decade for initiatives that will help achieve net-zero emissions in its finance portfolio, Reuters reported, citing a statement from Thailand's second-largest lender by assets.

* Ujjivan Small Finance Bank Ltd.'s board approved Oct. 30 the lender's merger with its holding company, Ujjivan Financial Services Ltd. The scheme remains subject to, among other things, approval from India's central bank and securities regulator.

* DCB Bank Ltd.'s board granted in-principle approval for the planned acquisition of a 9.90% stake in Svakarma Finance Pvt. Ltd. The Indian lender could invest up to 20.4 million rupees in the nonbank financial firm that will pave the way for its entry into lending for micro, small and medium-sized enterprises.

* Indian Bank declared the nonperforming accounts of SONAC, Pune Sholapur Road Development Co. Ltd. and M P Border Checkpost Development Co. Ltd., with total outstanding dues of 2.67 billion rupees, as fraud. The lender reported the accounts to the Reserve Bank of India.

* The National Bank of Pakistan said it detected a cyberattack that affected some of its services from the late hours of Oct. 29 to early Oct. 30, Dawn reported, citing a statement from the bank. The Pakistan-based lender assured the public that immediate steps were taken to isolate the impact and that no customer or financial data has been compromised so far.

* Australia's Macquarie Group Ltd. raised A$1.5 billion upon the completion of its institutional placement that will result in the issuance of 7.7 million new ordinary shares priced at A$194.00 apiece. The company indicated earlier that it will use the fresh capital to finance future investments.

* Commonwealth Bank of Australia, or CBA, has pleaded guilty to 30 criminal charges related to the false or misleading sale of consumer credit insurance to 165 customers between 2011 and 2015, making good on earlier commitment to do so.

* In a separate matter, CBA teamed up with the Commonwealth Scientific and Industrial Research Organisation to investigate the potential impacts of climate change on the financial sector of Australia. The pair launched a joint public-private sector initiative that will develop a roadmap to help financial services providers manage and reduce risks associated with climate change.

FINANCIAL SERVICES

* South Korea's Shinhan Financial Group Co. Ltd. will acquire a 95% stake in BNP Paribas Cardif General Insurance from BNP Paribas SA for 40 billion won, Yonhap News Agency reported, citing industry sources.

* Thai Credit Guarantee Corp. appointed Theeraj Athanavanich as chairman of the board, effective Oct. 28.

POLICY AND REGULATION

* Companies that have been listed on the Beijing Stock Exchange for less than a year will not be allowed to transfer listing, according to the Chinese bourse's recently released official rules and regulations, which will take effect Nov. 15.

* South Korea's Financial Services Commission and Financial Supervisory Service sought action plans from commercial banks in the country to guarantee a stable supply of credit loans and tighter supervision of household debts, The Korea Herald reported, citing officials. Authorities also advised bank executives to monitor loan supply systems and be on the lookout for a possible loan crunch.

* Under updated guidelines from India's Ministry of Finance, state-run lenders may set their own threshold for staff accountability over nonperforming accounts up to 500.0 million rupees, The Economic Times reported, citing the ministry. The new guidelines will take effect in April 2022 for accounts turning bad on or after the start of that month.

* The Australian Securities & Investments Commission released guidance on crypto-asset exchange traded and other investment products for compliance by product issuers and market operators. The regulator also introduced a crypto-asset category in its licensing rules.

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Eden Estopace, Kanas Chan, Jonathan Cheah, James Lim and Santibhap Ussavasodhi contributed to this report.

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