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Bank of East Asia to oppose Elliott suit; MAS probes banks over 1MDB

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Bank of East Asia to oppose Elliott suit; MAS probes banks over 1MDB

*Bank of East AsiaLtd. vowed to strongly oppose Elliott Management Corp.'s "unfair prejudicepetition" in Hong Kong, claiming that the U.S. hedge fund's intention issimply "to put the bank in play." The Hong Kong-based lender wasresponding to Elliott's lawsuit over alleged unfair conduct on the part of thebank's directors and serious governance failings

*South Korean banks are increasingly opening up foreign direct investmentcenters to obtain business from foreign companies investing in South Korea, Money Today reported.

*The Monetary Authority of Singapore is investigating several banks for potential violation ofanti-money laundering rules in their transactions linked to Malaysian stateinvestment fund 1Malaysia Development Bhd., or 1MDB, Reuters reported, citing"three people with knowledge of the matter." The banks under reviewinclude UBS Group AG,DBS Group HoldingsLtd., Falcon PrivateBank Ltd. and Coutts International.

* XLCatlin's insurance operations appointed Nicole Yates as head of accident and healthfor Australia. Yates was recently national underwriter for accident and healthat Zurich Australia.

GREATER CHINA

*China held a total of US$3.21 trillion of foreign exchange reserves as of theend of June, about 30.4% of the country's GDP, Wallstreetcn.com reported.Analysts said the U.S. dollar accounted for 66.7% of China's foreign exchangereserves while euro assets accounted for 19.6% of the foreign exchange reserves.

*China's commercial banks recorded a nonperforming loan ratio of 1.81% at theend of June, the highest in nearly seven years, Beijing Business Today reported.Insiders said the steady rise of NPL ratios quarter by quarter would lead tothe accumulation of more risks. The China Banking Regulatory Commission wouldexpand institutions that perform trial programs on nonperforming assetsecuritization.

*Six hundred sixty wealth management products in China did not realize theirexpected highest returns rate in the first half, Beijing Business Today reported.Thirty WMPs from HSBC suffered losses during the same period.

*The People's Bank of China unveiled a medium-term lending facility program with227 billion yuan, which includes 53 billion yuan of three-month MLF, 134.5billion yuan of six-month MLF and 39.5 billion yuan of one-year MLF, TencentFinance reported.

*China Development BankCorp. denied reports that it suggested all financial institutionsto suspend purchasing government bonds and enterprise bonds in Liaoningprovince, China, National Business Newsreported. The bank'sstatement came after several bond defaults occurred in the province.

*According to market estimates, listed companies in Taiwan were expected to payout about NT$420 billion in cash dividends to foreign investors during theex-dividend season, the Taipei Times reported.The cash dividend allocation to foreign institutional investors is expected tohit NT$250 billion by July 22, paving the way for the investors to remit fundsout of the island.

*The Asian Development Bank revised its forecast downward for Taiwan's economicgrowth for 2016 to 1.1% from a March estimate of 1.6%, attributing theadjustment mainly to the island's weak economy in the first quarter, the Taipei Times reported.

*Fubon Financial Holding Co.Ltd.'s insurance unit purchased property assets in Taipei for NT$4billion, Reuters reported.

*Hong Kong Exchanges &Clearing Ltd. started publishing its TR/HKEx yuan currency indicesthat track the Chinese currency against a basket of 14 currencies fromcountries that are major trading partners of China, South China Morning Post reported.The move is in line with the exchange's push to expand its yuan business andmove into the currency market.

JAPAN AND KOREA

*Hachijuni Bank Ltd.,Musashino Bank Ltd.,and five other regional banks will cooperate on financial technology with thegoal of developing a joint service platform, Tokyo's The Nikkei reported.

*Convenience stores in Japan are turning into 24-hour banking outlets,eliminating the need to be physically present at a bank to make bill payments, The Nikkei reported.

*The South Korean government will inject about 1 trillion won into andExport-Import Bank ofKorea, The Chosun Ilbo reported.The money will come from a supplementary budget estimated to reach more than 10trillion won.

*South Korea's Financial Supervisory Service will conduct on-site inspections oflending operations at South Korean banks until July 22, The Chosun Ilbo reported.

*Woori Bank beganmarketing mortgage loans in Vietnam in collaboration with , The Chosun Ilbo reported.

*South Korean nonlife insurers are beginning to get loss ratios under controlafter raising auto insurance premiums, the KoreaEconomic Daily reported.

*South Korea's Financial Services Commission looks to tighten internal rules onstock trades and ban new share trading by officials with a rank of 4 or higher,Yonhap News Agency reported.

ASEAN

* plans to setup a subsidiary company to focus on fintech, Thailand's Post Today reported.The digital banking and innovation team of the bank will be transferred to thesubsidiary.

*Government SavingsBank expects that its retail credit growth in 2016 will stand ataround 7% while total credit growth will be at around 3%, Thailand's Krungthep Turakij reported. The bankwants to lower its nonperforming loans down to around 1.8% to 2% by the end of2016 from the level in the beginning of the year at 2.3%.

*The Thai Bankers' Association will hire celebrities and famous athletes to helppromote the PromptPay system and boost public confidence towards the system,Thailand's Thai Rath reported. Some banks arelaunching campaigns encouraging its customers to use the system.

*Bank Negara Malaysia said that measures introduced in the last couple of yearsare sufficient to maintain the current household debt level, which is one ofthe highest in Asia at 89% of Malaysia's GDP, Bernama reported.

*AFFIN Bank Bhd. islowering its base rate to 3.80% from 3.99% per annum, effective July 19,Malaysia's The Star reported.Its base lending rate would also be cut to 6.66% per annum from 6.85%.

*The Indonesian government has appointed 18 banks, 18 investment managers and 18securities companies as gateways for repatriated assets in the tax amnestyprogram, estimated to be worth trillions of rupiah, The Jakarta Post reported.

*Indonesia's Infobank reportedthat Indonesia's US$900 million trade surplus in June, a substantial increasefrom US$374 million in May, might lead to further cuts in the country'sbenchmark rate.

*Bank Indonesia Governor Agus Martowardojo estimates that real estate investmentfunds will experience a boom in 2017 from tax amnesty funds, Bisnis Indonesia reported.

*Fitch Ratings upgraded the long-term issuer default ratings ofChina Banking Corp.,Philippine NationalBank, RizalCommercial Banking Corp. and Security Bank Corp. to BB+ from BB on the back of thecountry's improving economy and banking regulations. The outlooks on theratings are stable.

SOUTH ASIA

*Reserve Bank of India Governor Raghuram Rajan said the Unified PaymentInterface for banks would be functional by the end of July, The Hindu Business Line reported.With the interface, a bank can provides the user a virtual address that can beshared with the payee.

*ICICI Bank Ltd. andPrudential Plc jointventure ICICI Prudential LifeInsurance Co. Ltd. filed a preliminary prospectus for its planned IPO inIndia. ICICI Bank, which owns a 68% stake in the insurer, said it would sellaround 12.65% of the insurer's equity shares through the proposed IPO.

*ESAF Microfinance and Investments Pvt. Ltd. has applied for final regulatoryapproval to set up a small finance bank, the Press Trust of India reported,citing A.G. Varughese, the company's executive vice president. ESAFMicrofinance was previously granted in-principle approval from India's central bankin September 2015.

*Bandhan Financial ServicesLtd. unit Bandhan Bank cut its lending rate for the third time forloans to micro-sized businesses by 60 basis points to 19.90% from 20.5%,India's Business Standard reported.

AUSTRALIA AND NEW ZEALAND

*The Australian Securities and Investment Commission was urged to amend itsclaims against Westpac BankingCorp. and Australia& New Zealand Banking Group Ltd., which will delay the banks'filing defenses on the regulator's allegations of possible rigging of the benchmarkBank Bill Swap Rate, The AustralianFinancial Review reported.

*S&P Global Ratings said the number of home loans in arrears rose acrossprime residential mortgage-backed securities in May across the Australianhousing market for the seventh consecutive month, The Australian reported.This affected major Australian banks, which saw their clients falling furtherbehind than those in nonbanks, smaller lenders and institutions that do nottake deposits.

*The New Zealand dollar fell by more than 1%, following weaker-than-expectedinflation data, which assured another cut to the Reserve Bank of New Zealand'sofficial cash rate during its policy meeting in August, The Sydney Morning Heraldreported.

IN OTHER PARTS OF THE WORLD

MiddleEast & Africa: National Bankof Kenya ex-CEO arrested; Saudi's NCB, Riyad Bank report Q2 profits

Europe:Italy's €50B bank bailout plan;Deutsche Bank branch closures; Turkey's financial stability measures

LatinAmerica: Banco do Brasil eyesasset sales to boost capital

NorthAmerica: BofA, Charles Schwabreport earnings

NorthAmerica Insurance: Ore. regulatormulls coverage extension for failed co-op's policyholders; HHS' Burwelladvocates for competition in health insurance market

S&P Global Ratings andS&P Global Market Intelligence are owned by S&P Global Inc.

Sally Wang, Jonathan Cheah,Jaekwon Lim and Santibhap Ussavasodhi contributed to this report.

The Daily Dose has aneditorial deadline of 6:30 a.m. Hong Kong time. Some external links may requirea subscription.