trending Market Intelligence /marketintelligence/en/news-insights/trending/20TuaeEMuZh_hzd6H58CwA2 content esgSubNav
In This List

China drafts rules on loan provisions; India to consider bailout framework

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


China drafts rules on loan provisions; India to consider bailout framework

GREATER CHINA

* China's Ministry of Finance released draft rules stipulating that banks with provision coverage ratios exceeding 300% would need to distribute provisions beyond that amount as dividends, the Securities Times reported. The ministry will continue accepting public feedback on the draft rules until Oct. 26.

* The People's Bank of China issued a total of 10 billion yuan of bills in Hong Kong. The central bank bills will mature in six months, with an interest rate at 2.89%.

* Fubon Bank (China) Co. Ltd. signed a strategic agreement with Tencent Cloud Computing Co. Ltd. to accelerate the lender's digitalization strategy, the China Securities Journal reported.

* Arthur Yuen, deputy CEO of the Hong Kong Monetary Authority said virtual banks in the city could begin offering some initial services in the fourth quarter, the South China Morning Post reported. The launch of virtual banking services will be "gradual," he added. The regulator has so far granted eight virtual banking licenses, according to the report.

*The risk of default in China's dollar-debt market will rise in 2020 as US$8.6 billion stressed offshore bonds become due in the year, Bloomberg News reported. This debt accounts for almost 40% of the total outstanding corporate dollar bonds from the country's troubled companies.

JAPAN AND KOREA

* Japan Bank for International Cooperation will form a business tie-up with the state of Texas to attract investments from Japanese corporations, Tokyo's The Nikkei reported. The Japanese company will provide financial support in a number of fields including shale gas and natural gas, as well as disaster prevention and IT industries. The company has so far issued loans to shale gas and liquid natural gas projects operated by Japanese companies in 2014.

* Oita Bank Ltd. is collaborating with SBI Business Solutions to offer a streamlined online approval system for local small business clients, The Nikkei reported.

* With Japan's long-term interest rate shifting at the negative range, more larger banks are using online mortgage alternatives over traditional loans to streamline processes and cut costs, The Nikkei reported. The outstanding home loan balance of the country's three largest megabanks decreased 3% year over year to ¥31.6 trillion at the end of March 2019, while internet banking firm SBI Sumishin Net Bank Ltd. posted an 18% increase year over year to ¥820 billion in new loans for the same period.

* South Korea's NongHyup Financial Group Inc. signed an updated agreement with France's Amundi Asset Management SAS to strengthen cooperation between the companies, boost their joint venture NH Amundi Financial's overseas expansion projects and establish a special dividend, the Maeil Business Newspaper reported.

ASEAN

* The Philippine central bank cut its key interest rates for the third time this year amid a "benign" inflation outlook. Bangko Sentral ng Pilipinas, which cut rates in May and August, lowered the interest rate on its overnight reverse repurchase facility by 25 basis point to 4.0%. The interest rates on the overnight deposit and lending facilities were reduced accordingly to 3.5% and 4.5%, respectively.

* The Indonesian Financial Services Authority, or OJK, appointed Dody Budi Waluyo, deputy governor of Bank Indonesia, to be a member of OJK's board of commissioners that represent the central bank, Bisnis Indonesia reported. He replaces Mirza Adityaswara in the role, whose term has ended.

* Indonesian state lender PT Bank Rakyat Indonesia (Persero) Tbk has acquired 90% of shares in general insurance firm PT Asuransi Bringin Sejahtera Artamakmur as part of the lender's plan to provide integrated financial products and services, Infobank reported.

* The Association of Banks in Malaysia said member banks will stop charging fees for transactions made over the counter and at cash deposit machines to settle credit card bills and repay financing arrangements, Bernama reported. Up to 26 local commercial banks are ABM members.

SOUTH ASIA

* India's regulators are set to announce a new framework that will lay out a standard line of action for government agencies to rescue stressed financial firms, Business Standard reported, citing unnamed sources. One major hurdle is a lack of coordination between the regulators, which they are slated to discuss at a meeting of a panel of the Financial Stability and Development Council, an inter-regulatory body.

* India's Muthoot Finance Ltd. said it plans to raise up to 10 billion rupees in capital by issuing nonconvertible debentures with annual yields ranging from 9.25% to 10%, the Press Trust of India reported. The base size of the issue will be 1 billion rupees, with an option to retain an oversubscription of up to 9 billion rupees. The firm plans to use the capital raised from the issue to finance its lending business.

* India's Axis Bank Ltd. said in a bourse filing that it has raised 125.0 billion rupees from the completion of a qualified institutional placement, confirming earlier reports. The lender priced its equity shares sold in the placement at 629 rupees apiece.

* A group mandated by the Reserve Bank of India study group to review and simplify the current liquidity management framework recommended the central bank to keep the overnight call money rate, which is closely tied to the policy rate, The Economic Times reported. The group also proposed using longer-term variable repo rates of more than 14 days and tenors of up to one year as an alternative to open market operations.

AUSTRALIA AND NEW ZEALAND

* Latitude Financial Services Ltd CEO Ahmed Fahour could take home a bonus of A$22.5 million if the Australian nonbank lender successfully launches its A$1.40 billion IPO, The Australian Financial Review reported. Fahour, who has been pushing the company into the buy-now, pay-later business, expects the lender to benefit from lower interest rates as it borrows from the capital market. The package that the executive is set to receive will be higher than the ones received by his counterparts at Australia's major banks.

* The Australian Banking Association warned against the Australian Prudential Regulation Authority's plan to introduce capital reforms that are stricter than Basel III standards, The Australian reported, citing the group's submission on the proposed capital framework. ABA said the plan, which would lower the current risk-weight exposure for small and midsize enterprises to 85% from 100%, among others, will affect credit flow to certain sectors and negatively impact the weakening economy. APRA plans to introduce the new framework in 2022.

* The Reserve Bank of New Zealand invested US$100 billion of green bonds via the Bank for International Settlement's U.S. Dollar Green Bond Investment Pool, or BISIP G1. The central bank funded the investment from its foreign reserves portfolio. BISIP G1 invests in green bonds issued by agencies and sovereigns.

* AustralianSuper named Don Russell its new chairman, replacing Heather Ridout who will stay with the fund as a member of the investment committee, The Sydney Morning Herald reported. Russell was a global investment strategist at BNY Mellon Asset Management Australia. He was appointed to the board of the superannuation fund in May.

IN OTHER PARTS OF THE WORLD

Middle East & Africa: Netanyahu to form Israel's new government; Old Mutual-Moyo dispute continues

Europe: Deutsche raid; ex-Danske exec found dead; Credit Suisse spy drama deepens

Latin America: Chile's BCI to expand in US, Peru; IMF says Argentina 'may have to wait'

North America: Fintechs gaining personal loan market share; Goldman enters European ETF biz

Global Insurance: WellCare divestment; insurers optimistic; Metromile IPO; Lorenzo strengthens

R Sio, Sally Wang, Sarun Saelee, Cathy Hwang, Emi White and Aditya Suharmoko contributed to this report.

The Daily Dose has an editorial deadline of 6:30 a.m. Hong Kong time. Some external links may require a subscription. Links are current as of publication time, and we are not responsible if those links are unavailable later.