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McKinsey warns of debt crisis in Asia; DBS eyes India's credit card market

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McKinsey warns of debt crisis in Asia; DBS eyes India's credit card market

* McKinsey & Co. said there are "ominous" signs of a new debt crisis in Asia, like the one in 1997, as the health of the real and financial sectors is deteriorating. It urged governments and businesses to monitor debt defaults and liquidity mismatches and take preventive action.

GREATER CHINA

* China's five major state-owned banks met the target of increasing loans to small businesses by 30% from the previous year as of end-June, Caixin reported, citing Zhou Liang, vice chairman of the China Banking and Insurance Regulatory Commission. Those lenders also cut financing costs for small businesses by one percentage point in the same period.

* Agricultural Bank of China Ltd. issued 85 billion yuan worth of undated Tier-1 capital bonds Aug. 20. The nominal interest rate for the bonds will be 4.39% for the first five years. The bank on August 19 redeemed 30 billion yuan worth of Tier-2 capital bonds issued in August 2014.

* Postal Savings Bank of China Co. Ltd. said the board approved a plan to issue no more than 80 billion yuan worth of the perpetual bonds to replenish its additional Tier 1 capital, after posting a 14.94% year-over-year increase in net profit for the six months ended June 30.

* Bank of Jinzhou Co. Ltd. said it expected a net loss of between 4 billion yuan and 5 billion yuan for 2018, and another net loss of between 500 million yuan and 1 billion yuan for the first six months of 2019. The lender was hit by increased impairment losses as nonperforming loans rose.

* The People's Bank of China set the one-year loan prime rate at 4.25% under the new, more market-driven mechanism. It is 10 basis points lower than the benchmark lending rate and 6 basis points lower than the previous LPR.

* The China Securities Regulatory Commission is considering a "side pocket" mechanism for mutual funds that would separate their illiquid and risky assets from more liquid investments, Xinhua News Agency reported. The regulator is seeking public comment on the draft guidelines

JAPAN AND KOREA

* LINE Securities, a joint venture between LINE Financial Corp. and Nomura Holdings Inc., launched a mobile investment platform allowing trades of just one share.

* Japan's US$1.5 trillion Government Pension Investment Fund has lost money in equities, fixed income and currency positions in the recent months, Bloomberg News reported, citing Chief Investment Officer Hiromichi Mizuho. GPIF is seeking uncorrelated returns by pushing into private investments, amid negative yields in bonds and sliding Nikkei index.

* MS&AD Insurance Group Holdings Inc. will inject additional ¥9 billion into its U.S.-based Corporate Venture Capital, bringing its total investment to ¥13.5 billion, The Nikkan Kogyo Shimbun reported. During the first nine months of its operation, the company has invested in over 20 firms in finance and insurance sector based primarily in the U.S.

* South Korea's Financial Supervisory Service said the regulator will launch a relief program next month for investors who were not fully explained about the risk of the controversial derivatives linked to offshore interest rate movements, the Pulse News reported.

ASEAN

* Thailand's Government Housing Bank plans to extend 27 billion baht of loans with low interest rates between 2.5% and 2.75% to stimulate the Thai economy, Post Today reported. The plan, however, could hurt the lender's profit in 2019.

* WhatsApp Inc. is in advanced talks with GO-JEK, Ant Financial Services Group-backed DANA and fintech startup OVO to offer mobile transaction services in Indonesia, Reuters reported, citing sources familiar with the matter.

SOUTH ASIA

* Singapore's DBS Group Holdings Ltd. plans to enter India's credit card sector in the second or third quarter of 2020, Reuters reported, citing Shantanu Sengupta, the group's head of consumer banking in India.

* Central Bank of India Managing Director and CEO Pallav Mohapatra said the state-run bank plans to raise 20 billion rupees to 30 billion rupees by issuing equity shares in multiple tranches during the next two months to replenish its capital, MoneyControl reported.

* Union Bank of India and other lenders may take over Dewan Housing Finance Corp. Ltd. as part of the troubled company's resolution plan if they cannot find new investors, MoneyControl reported.

* Bangladesh's government swapped the managing directors/CEOs of Rupali Bank Ltd. and Sonali Bank Ltd., Dhaka Tribune reported, citing a government circular.

AUSTRALIA AND NEW ZEALAND

* Australia's Zip Co Ltd. will acquire Auckland-based PartPay for nearly A$50 million and boost its stake in U.S.-based QuadPay to 15% for US$11.4 million, The Australian Financial Review reported. The company hopes to close the deal by end-October.

* National Australia Bank Ltd. filed a lawsuit against events management company Human Group, which was founded by the bank's former chief of staff Helen Rosamond, The Australian Financial Review reported. The suit is said to be related to Rosamond, who was charged with 56 counts of bribery in connection with an alleged fraud against the bank in March.

* Pepper Group Ltd. is postponing its plan to list its Australian assets until 2020, The Australian reported, without citing sources. Those assets are expected to be worth about A$700 million.

IN OTHER PARTS OF THE WORLD

Middle East & Africa: Zenith Bank profit up; Fitch downgrades Lesotho; Sanlam expects lower earnings

Europe: ECB hack warning; Jyske earnings; SocGen to take part in cum-ex trial

Latin America: Chile's economy grows 0.8% in Q2; new chairman at Banco do Nordeste

North America: Texas bank eyes in-state peer buy; CECL may impact bank M&A pricing

Global Insurance: Root's valuation; BA cyber policy; Guy Carpenter wins key role

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

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