TOP NEWS IN BANKING & FINANCIAL SERVICES
* Asian firms are gearing up for potential effects of the conflict between Russia and Ukraine. South Korea's financial regulators started drafting contingency arrangements for the deployment of resources and tools, such as market stabilization funds, to calm the market if it takes a hit from the ongoing crisis, The Korea Herald reported, citing a source with knowledge of the matter.
South Korean lenders KEB Hana Bank and Woori Bank are preparing contingency measures for the potential impact of the recent sanctions against Russia on their operations in the country, The Korea Times reported. Hana Bank's loan exposure was estimated to reach 296 billion won in the third quarter of 2021, while Woori Bank's loan exposure was about 266.4 billion won for the same period, the report added.
Meanwhile, Industrial & Commercial Bank of China Ltd., or ICBC, and Bank of China Ltd. restricted financing for Russian commodities amid Russia's military action of Ukraine, Bloomberg News reported, citing unnamed sources. ICBC stopped issuing U.S. dollar-denominated letters of credit for purchases of physical Russian commodities ready for export, while Bank of China curbed financing based on its own risk assessment as it awaits guidelines on Russia from Chinese regulators. The two lenders, as well as the China Banking and Insurance Regulatory Commission, did not immediately respond to requests for comment, the news platform added.
* China's securities regulator ordered Morgan Stanley to share details of an ongoing U.S. investigation into the investment bank's block trading business, the Financial Times reported. The bank declined to comment on the probe, which comes as it seeks regulatory approval to expand in China.
➤ China's loan growth numbers to look more modest after January record
Banks in China issued 4.199 trillion yuan of new loans in January, the strongest month on record, according to data released Feb. 11 by the People’s Bank of China.
➤ Credit card delinquency, net loss rates tick up while yields fall in January
Bank of America President and CEO Brian Moynihan noted during the bank's Feb. 17 conference presentation that paydown rates on cards are starting to slow down.
BANKING
* The exposure to the Ukrainian and Russian markets of banks, insurers and securities firms in Taiwan dropped by NT$10 billion to NT$217.91 billion as of Jan. 31, the Taipei Times reported, citing the Financial Supervisory Commission. The investments in Russia of Taiwan's top two financial holding firms, Fubon Financial Holding Co. Ltd. and Cathay Financial Holding Co. Ltd., totaled NT$21.2 billion and NT$20 billion, respectively. The firms have no investments in Ukraine.
* The Indian government's planned capital infusion of 150.00 billion rupees to support state-owned banks will be allocated mostly to weaker public sector lenders like Central Bank of India and Punjab & Sind Bank, Press Trust of India reported, citing unnamed sources.
FINANCIAL SERVICES
* China's Beijing State-owned Capital Operation and Management Co. Ltd. issued €1 billion of three-year overseas bonds with the assistance of Deutsche Bank, Shanghai Securities News reported.
* Mitsubishi UFJ Kokusai Asset Management Co. Ltd., Nomura Asset Management Co. Ltd. and Carrera Asset Management Co. Ltd. announced plans to stop accepting orders for some investment trusts after the Japanese government imposed sanctions against Russia, Tokyo's The Nikkei reported. Mitsubishi UFJ stopped accepting orders for a mutual fund that invests in Russian sovereign bonds, while Nomura said it will cease accepting accounts and commence cancellation orders for an exchange-traded fund linked to the Russia Trading System Index. Carrera temporarily halted orders for an equity fund that invests in Russia's largest bank, Sberbank of Russia, and PJSC Rosneft Oil Co.
* South Korea's Hana Bank is expanding its wealth management services to include trading art pieces, The Korea Herald reported. The lender signed an agreement with Seoul Auction to jointly develop new business opportunities in art-related financing and banking services such as non-fungible tokens and metaverse platforms.
* Madhusudan Kela acquired a combined 83.66% stake in India-based Ikab Securities & Investment Ltd. within two days following the acquisition of a total of 2,858,027 shares, the company said in a stock exchange filing. Kela made an open offer for the shares in November 2021, allocating a total of 134.3 million rupees in cash for the transaction that made him a promoter of the company.
* Australia's Zip Co. Ltd. agreed to acquire American buy-now, pay-later firm Sezzle Inc. in an all-scrip transaction via a statutory merger. The total consideration for Sezzle shares has an implied value of approximately A$491 million.
POLICY AND REGULATION
* A proposal to set up a Chengdu-Chongqing financial court, which will have jurisdiction over finance-related civil, commercial and administrative lawsuits in Chongqing and parts of Sichuan province within China's Chengdu-Chongqing economic circle, was submitted for review to an ongoing session of China's Standing Committee of the National People's Congress, Xinhua News reported.
* The China Banking and Insurance Regulatory Commission and the Ministry of Housing and Urban-Rural Development jointly issued a guideline encouraging banks and insurance institutions to issue more financial bonds to support the development of government-subsidized rental housing.
* China's Banking Credit Assets Registration and Circulation Center issued a trial regulation on charges for transferring nonperforming loans, which will take effect June 1. The regulator will waive some charges and provide discounts during the first year of implementation.
* New Zealand's central bank is considering changes to its liquidity policy for registered lenders and is seeking feedback for the plan until April 14. Over time, the Reserve Bank of New Zealand plans to extend the policy to a broader set of deposit takers including banks operating in the country as branches.
INDUSTRY NEWS
* Japan will join the U.S. and other Western countries in blocking certain Russian banks from accessing the Society for Worldwide Interbank Financial Telecommunication, or Swift, global payment system, Reuters reported, citing Prime Minister Fumio Kishida. Japan will also freeze assets of Russian lenders State Development Corp., Promsvyazbank PJSC and Bank Rossiya, Jiji Press said in a separate report. The restrictions on transactions between Japanese banks and the three Russian banks may affect fund supplies to Japanese firms operating in Russia, according to the report.
As of Feb. 25, US$1 was equivalent to 6.32 Chinese yuan, NT$28, 1,199.39 South Korean won and 75.11 Indian rupees.
Click here for a summary of indexes on the S&P Capital IQ Pro platform.
Eden Estopace, Sally Wang, Sarun Saelee, Cathy Hwang, Emi White and Aditya Suharmoko contributed to this report.
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