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Malaysian banks in deal talks; More banks fined in 1MDB case


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Malaysian banks in deal talks; More banks fined in 1MDB case

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 may require a subscription.

Malaysian banks' deal talks and more

* Malaysia's RHB Bank Bhd. and AMMB Holdings Bhd. entered into an exclusivity agreement to negotiate and finalize terms and conditions of a possible merger after securing approval from Bank Negara Malaysia. The exclusivity agreement will expire Aug. 30.

* Apollo Global Management LLC-backed private equity firm, Aion Capital Partners, is reportedly interested in buying a stake in India's Catholic Syrian Bank Ltd. Meanwhile, India's central bank has asked Catholic Syrian Bank to settle differences in pricing valuation with Fairfax Financial Holdings Ltd. before dealing other potential buyers.

* South Korea's Hana Financial Group Inc. is reportedly in talks to sell a less than 50% stake in unit KEB Hana Bank (China) Co. Ltd. to CEFC China Energy.

* Taiwan's Cathay Financial Holding Co. Ltd. agreed to acquire Bank of Nova Scotia Bhd., the Malaysian banking unit of Canada-based Bank of Nova Scotia, for about US$255 million.

* Indonesian conglomerate Salim Group acquired at least a 51% stake in local lender PT Bank Ina Perdana Tbk for an estimated 570 billion Indonesian rupiah.

Legal, regulatory updates

* Singapore's central bank fined Credit Suisse Group AG and United Overseas Bank Ltd. a total of S$1.6 million for breaching anti-money laundering rules as the regulator completed its two-year review of banks involved in 1Malaysia Development Bhd.-related transactions.

* Chinese regulator asked large and midsize commercial banks to set up inclusive finance divisions by the end of 2017 to increase lending to micro-, small and medium-sized enterprises.

* South Korea's Financial Services Commission decided to require all mutual savings institutions to meet tighter mortgage lending rules, effective June 1, as part of its efforts to curtail growth in household debt.

* The Hong Kong Monetary Authority said it may consider adopting biometrical authentication methods to combat financial crime and strengthen the overall security of the banking system.

Ventures in ASEAN

* Sumitomo Mitsui Trust Bank Ltd. completed the acquisition of a 49% stake in the financial leasing unit of JSCB for Investment and Development of Vietnam, or BIDV. Following the deal completion, the joint venture, BIDV-SuMi TRUST Leasing Co. Ltd., commenced operations May 26.

* Papua New Guinea-based Bank of South Pacific Ltd. signed a joint venture deal with RMA Cambodia to enter the Cambodian asset finance market. Under the agreement, the bank acquired a 50% stake in leasing firm RMA Finance, which is a subsidiary of RMA Cambodia.

Ratings actions

* Fitch Ratings downgraded its ratings on India's IDBI Bank Ltd. due to an erosion in the bank's systemic importance, rising nonperforming loans and heavy losses.

* Moody's assigned first-time credit ratings and assessments to China Banking Corp., with a stable outlook.

* Moody's raised its outlook on Singapore's banking sector to stable from negative, citing stabilized commodity prices and improved growth conditions.

* Moody's affirmed the long-term local-currency deposit, and local- and foreign-currency issuer ratings of Vietnam Joint Stock Commercial Bank for Industry & Trade, or Vietcombank, at B1 and upgraded its baseline credit assessment and adjusted baseline credit assessment to "b1" from "b2".

In other news

* IDBI Bank plans to limit growth in its corporate loan book, raise additional capital and sell noncore assets as part of its turnaround strategy, following a ratings downgrade by Moody's.

* Meanwhile, Moody's said India's latest efforts to curb the high nonperforming assets level are credit positive for the sovereign and would help ease the government's high debt burden if implemented successfully.

* The State Bank of Pakistan gave regulatory approval to SimSim, the country's first free mobile wallet, under the central bank's branchless banking regulation framework.

* 16 Vietnamese banks, including Vietcombank and Vietnam Prosperity JSCB, or VP Bank, are preparing to raise about 37 trillion Vietnamese dong in 2017 to meet Basel II requirements, scheduled to be implemented in September.

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