S&P Global Market Intelligence offers our top picks of banking news stories and more published throughout the week. Please note that some entries may have links to third-party sources that require a subscription.
Chinese banks report first-half earnings
* Chinese banks saw net profits for the first half ended June increase year over year. Industrial & Commercial Bank of China Ltd. posted a 4.7% increase in net profit for the six months. The bank's net profit attributable to equity holders rose to 167.93 billion yuan from 160.44 billion yuan in the year-ago period. China Construction Bank Corp. said first-half net profit climbed 4.87%, which the bank attributed to higher interest and fee income.
*China Merchants Bank Co. Ltd. said net profit for the first half rose 13.08% from a year earlier, driven by higher income from lending. Net profit for the six months ended June 30 totaled 50.61 billion yuan, up from 44.76 billion yuan. Shanghai Pudong Development Bank Co. Ltd. posted a 12.38% rise in net profit for the half to 32.11 billion yuan, up from 28.57 billion yuan a year earlier. Bank of Communications Co. Ltd. reported a 4.85% year-over-year increase in net profit for the period to 42.75 billion yuan, down from 40.77 billion yuan. Bank of Beijing Co. Ltd. said its net profit rose 8.56% year over year to 12.87 billion yuan, up from 11.85 billion yuan. China CITIC Bank Corp. Ltd. posted a 10.05% increase in net profit for the first half on higher interest and fee income. Industrial Bank Co. Ltd. said its net profit rose 6.60% to 35.88 billion yuan. China Everbright Bank Co. Ltd. said net profit attributable to equity shareholders for the six months increased 13.11% year over year, to 20.44 billion yuan from 18.08 billion yuan.
* Malaysia's biggest banks reported diverging results for the second quarter. RHB Bank Bhd. posted a 7.9% year-over-year rise in net profit for the second quarter amid an increase in other operating income and income from its Islamic banking business. Malayan Banking Bhd. posted a 0.9% decline in profit for the quarter to 1.94 billion ringgit from 1.96 billion ringgit. CIMB Group Holdings Bhd.'s second-quarter profit attributable to owners of the parent dropped 23.8% to 1.51 billion ringgit from 1.98 billion ringgit in the year-ago period. Hong Leong Financial Group Bhd. reported a 3.2% increase in net profit for the fiscal fourth quarter ended June 30 to 468.7 million ringgit, or 41 sen per basic share, from 454.3 million ringgit, or 39.7 sen per basic share.
* National Bank of Pakistan reported a 6.6% year-over-year decline in profit for the second quarter to 7.10 billion rupees from 7.59 billion rupees.
Digital banks and cryptocurrency make strides in Asia Pacific
* The Monetary Authority of Singapore is accepting applications for new digital bank licenses. Interested parties have until Dec. 31 to submit their applications, the central bank said.
* Maybank is considering applying for a digital bank license in Singapore, The Business Times reported. The bank is considering all options, including whether to apply to the existing internet-only bank framework, partner with another party for a digital wholesale bank license or apply for the new digital full bank license, said Alvin Lee, the bank's head of community financial services in Singapore.
* The People's Bank of China plans to launch its first state-backed cryptocurrency to seven institutions as early as Nov. 11, Forbes reported. The digital currency will be issued initially through seven institutions, including ICBC and China Construction Bank.
Regulatory developments
* China's central bank will require the country's banks to price mortgages with reference to the loan prime rate from Oct. 8, instead of the benchmark interest rate as they currently do. The PBOC said mortgages for first-time homebuyers would be charged at the five-year loan prime rate, which was set at 4.85% on Aug. 20.
* The PBOC is also requiring banks to use the loan prime rate mechanism when setting the terms for at least 30% of new loans by end-September, the Securities Times reported. They should then raise the proportion of such loans to at least 50% by end-December and at least 80% by end-March 2020.
* Japan's Financial Services Agency will monitor the lending practice of merged regional banks to make sure they do not take advantage of the greater local market share to charge higher interest rates, The Nikkei reported. The FSA will also strengthen surveillance of banks that are showing sign of stress due to years of ultra-low rates and a shrinking population, Reuters reported.
In other news
* ICBC President Gu Shu expects additional but "manageable" pressure on its margins from the country's recent introduction of new benchmark lending rates, which has brought down borrowing costs.
* Japan's ORIX Corp. stopped its search for a buyer of its controlling stake in South Korean unit OSB Savings Bank due to unfavorable economic conditions, Yonhap News Agency reported. ORIX owns 76.77% of the mutual savings bank.
* The Indian government plans to inject 700 billion rupees into state-owned banks in the current fiscal year to boost their weak balance sheets, MoneyControl reported. The move will likely release 5 trillion rupees into the banking system for lending.
* The Australian Securities and Investments Commission is taking National Australia Bank Ltd. to court over the bank's so-called "introducer" scheme and is seeking a potential fine of more than A$500 million against the bank.
* India's Yes Bank Ltd. is in discussions with some private equity firms to raise around 90 billion rupees, CNBC TV18 reported.
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