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MUFG to buy stake in Bank Danamon; Australia pushes for banks' 'living wills'

GREATER CHINA

* A report by the China Banking Association on China's city commercial banks showed that five of the country's privately owned banks were profitable in 2016, reporting a total net profit of 980 million yuan during the year, the People's Daily reported. Furthermore, 17 privately run banks have been granted approval so far, with eight now operational.

* Shin Kong-HNA Life Insurance Co. Ltd., a joint venture of Taiwan's Shin Kong Life Insurance Co. Ltd. and China's HNA Group, said the Xi'an branch of the People's Bank of China imposed a penalty of 250,000 yuan on the joint-venture insurer's Shanxi branch for breaking China's anti-money laundering guidelines, Liberty Times reported.

* Wellington Koo, chairman of Taiwan's Financial Supervisory Commission, said the regulator is considering tightening regulatory controls on financial services providers' investments and is planning to unveil relevant policies in the next two months, the Taipei Times reported.

* Cathay Financial Holding Co. Ltd. said Taiwan's central bank may slightly increase its policy interest rates in 2018, as the island's economic growth outlook is positive for the first half, the Taipei Times reported. National Central University economics professor Hsu Chih-chiang said the central bank, under new leadership following the retirement of central bank Governor Perng Fai-nan, is likely to increase interest rates for the first time after six quarters.

JAPAN AND KOREA

* Japan's Financial Services Agency has approved the planned merger of AIU Insurance Co. Ltd and Fuji Fire & Marine Insurance Co. Ltd. The merger will be completed Jan. 1, 2018, and the merged entity will operate as AIG General Insurance Co. Ltd.

* SBI Holdings Inc. will launch a blockchain consortium with credit card industry partners including JCB Co. Ltd., Sumitomo Mitsui Card Co. Ltd. and Credit Saison Co. Ltd., The Nikkei reported.

* Japan Finance Corp. said Kazuho Tanaka, former vice finance minister, has been appointed as its new CEO, The Nikkei reported.

* NongHyup Financial Group Inc. nominated Lee Dae-hun, head of its mutual credit business, as CEO of NongHyup Bank, The Chosun Ilbo reported.

* The Seoul Central District Court ordered Korea Deposit Insurance Corp. to pay 53.2 billion South Korean won to BNK Financial Group Inc. in connection with the sale of its 56.79% stake in Kyongnam Bank Co., Ltd. in 2014, Money Today reported. BNK Financial Group filed a lawsuit in 2016 seeking compensation for additional nonperforming assets discovered after the acquisition.

ASEAN

* Thailand's Deposit Protection Agency said the new Deposit Protection Act has been implemented, the Daily News reported. Under the new law, depositors will automatically receive their savings within 30 days after a financial institution goes bankrupt.

* Bank of Thailand Governor Veerathai Santiprabhob said the central bank will maintain its easing monetary policies to facilitate the country's economic growth despite signs that the economy is recovering, the Post Today reported.

* Mitsubishi UFJ Financial Group Inc. agreed to acquire 73.8% of PT Bank Danamon Indonesia Tbk in a three-step transaction, subject to regulatory and shareholder approvals, as the former looks to establish a stronger presence in Indonesia.

* Debt prepayments and refinancing in the Philippines by borrowers rose to US$2 billion during the nine months ended September, up from US$1.1 billion in the year-ago period, The Philippine Star reported, citing Rosabel Guerrero, director of the Bangko Sentral ng Pilipinas' department of economic research.

SOUTH ASIA

* India's finance ministry has asked public sector lenders to cut loss-making domestic and overseas branches to strengthen their financials and improve overall efficiency, Press Trust of India reported, citing people with knowledge of the matter.

* Public sector lender IDBI Bank Ltd. said it decided to disengage its ratings contracts with Moody's Investor Service for issues made under its MTN Bond Program. The rating agency had downgraded the lender's ratings in August due to extremely weak capitalization, weak asset quality and lesser support from the government.

* Life Insurance Corp. of India upped its stake in Punjab National Bank by 4.04% to 13.93% through a qualified institutional placement.

* Canara Bank said its board approved raising of up to 35 billion rupees in additional equity share capital through the sale of 90 million shares through a qualified institutional placement.

AUSTRALIA AND NEW ZEALAND

* The Australian Prudential Regulation Authority is urging lenders to come up with plans for breaking them up in case of bankruptcy to ensure that the effects are not spread to other parts of the financial system, The Australian reported.

* The Australian banking industry and the federal government has extended an agreement to offer free ATM access to remote indigenous communities for five more years, The Australian reported. A total of 85 ATMs located across the country's Northern Territory, Queensland, Western Australia and South Australia come under the deal.

* Westpac Banking Corp. and its divisions, Bank of Melbourne, St George Bank and BankSA, will strictly scrutinize the digital consumer credit of property loan seekers in a bid to improve borrowing standards and serviceability, The Australian Financial Review reported. The bank will look into purchases made through loan financers such as AfterPay and ZipPay.

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

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