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Chinese regulators take over Baoshang Bank; Malaysia banks report Q1 earnings

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.

Chinese regulators take control of Baoshang Bank and other regulatory matters

* Chinese financial regulators have decided to take over Inner Mongolia-based Baoshang Bank Co. Ltd. due to concerns over credit risks. The People's Bank of China and the China Banking and Insurance Regulatory Commission decided to take over the bank for a one-year period to protect the interests of depositors and customers. The financial regulators have reportedly offered guarantees for at least 70% of the funds owed to certain creditors and corporate depositors of Baoshang Bank, Caixin reported. Meanwhile, the takeover highlights the credit risks faced by regional banks in the country and could be followed by further small bank failures as authorities become more tolerant of such incidents, according to S&P Global Ratings during a webcast.

* China's central bank is considering further moves to liberalize interest rates, including possibly scrapping the publication of official benchmark lending rates, the China Securities Journal reported.

* Indian housing finance regulator National Housing Bank is requiring large housing finance companies to appoint a chief risk officer to strengthen their risk management practices.

Malaysia banks report earnings

* Malaysia's biggest banks reported earnings for the first quarter with varied results. RHB Bank Bhd. posted a 6.7% year-over-year rise in net profit for the first quarter as allowances for credit losses on loans and other financial assets declined. CIMB Group Holdings Bhd. reported a first-quarter consolidated profit attributable to owners of 1.19 billion ringgit, down from 1.31 billion ringgit in the prior-year period. Malayan Banking Bhd. reported a 3.3% decline in profit for the first quarter, partly due to higher allowances for impairments. Meanwhile, Hong Leong Financial Group Bhd. posted a decline in net profit for the fiscal third quarter ended March as a rise in interest expense resulted in a decline in net interest income. The group reported net profit attributable to owners of 463.4 million ringgit, down from 502.6 million ringgit in the prior-year period.

* Falling provisions for bad loans helped two Indian banks narrow their net loss year over year for the fiscal fourth quarter ended March 31. Punjab National Bank's net loss for the fiscal quarter narrowed to 47.50 billion Indian rupees from 134.17 billion rupees in the prior-year quarter, while IDBI Bank Ltd.'s net loss narrowed to 49.18 billion Indian rupees for the fourth quarter from a net loss of 56.63 billion rupees in the prior-year period.

In other news

* A Chinese municipal court will auction a 12% stake in Bank Of Hainan Co.Ltd. on an online auction platform between June 24-25. The court will auction 360 million shares in the bank, at a starting bid price of 536.4 million yuan.

* Karur Vysya Bank Ltd. and Centrum Wealth Management Ltd. agreed to partner on the establishment of a wealth management joint venture company.

* South Korea's KEB Hana Bank opened its unit in Mexico, Banco KEB Hana Mexico, Yonhap News Agency reported. KEB Hana Bank also plans to add branches in Japan, India and Myanmar in 2019

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