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Hong Kong fines Deutsche Bank; Indian bank uncovers new fraud

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.

Fines, probes and more

* Hong Kong's Securities and Futures Commission fined investment bank CLSA Ltd. HK$9 million, and Deutsche Bank AG and its unit Deutsche Securities Asia Ltd. HK$8.3 million.

* South Korea's Financial Supervisory Service established a special team to investigate alleged irregularities in hiring entry-level employees at Hana Financial Group Inc. and unit KEB Hana Bank.

* Taiwan's financial regulator banned Chunghwa Post Co. Ltd. from selling insurance products through 46 branches in Keelung, Taiwan, for six months following an incident involving misappropriation of insurance premiums by an employee.

* India's Bank of Baroda is still facing a criminal complaint in South Africa even after it was absolved by a local court of being in possession of "proceeds of crime," or illegally acquired money or assets.

* Meanwhile, South Korea's Financial Services Commission proposed changes to corporate governance rules aimed at addressing a lack of transparency in nominating the heads of local banks.

Regulatory developments in China

* China is set to merge its banking and insurance authorities into one regulatory body, in a bid to enhance scrutiny of the country's financial system.

* China's financial regulators proposed an expansion of the capital-raising tools available to the country's commercial banks in order to support the banking system and strengthen banks' ability to support the real economy.

* The China Banking Regulatory Commission plans to clean up unqualified existing shareholders of commercial banks within one year after tightening bank shareholding rules in early January.

Bank frauds in India

* Punjab National Bank reportedly uncovered another credit-guarantee fraud at the Mumbai branch that is at the center of an alleged US$2 billion fraud. Separately, the bank said it recorded an additional exposure of 9.42 billion rupees to the total exposure it has in connection with the fraud case.

* India's Andhra Bank clarified that its exposure to Sterling group companies totals about 11.5 billion rupees, following reports that authorities are investigating a former director of the bank in connection with a 50-billion-rupee fraud case involving Sterling Biotech.

* Following the discovery of the alleged fraud at Punjab National Bank, India's central bank on March 13 banned banks from issuing letters of undertaking for trade credits for imports to India.

* Separately, the Indian central bank directed banks to provide details of letters of undertaking, or LOUs, that they issued over the past few years.

M&A updates

* KEB Hana Bank is expected to acquire a stake in Vietnam's state-owned Bank for Investment & Development of Vietnam Insurance Joint Stock Corp.

* Malayan Banking Bhd. and Permodalan Nasional Bhd. extended the date by which the conditions precedent for the acquisition of the latter's two units have to be met.

* South Korean conglomerate Lotte Group's unit, Lotte Card Co., Ltd., received final approval from Vietnam's central bank to acquire a subsidiary of Vietnam Technological and Commercial Joint Stock Bank.

* India's JM Financial Ltd. raised its stake in unit JM Financial Asset Reconstruction Co. Ltd. to 57.07% from 50.01%.

Earnings corner

* China's Ping An Bank Co. Ltd. reported a year-over-year increase in net profit for the year ended Dec. 31, 2017.

* Sri Lanka's National Savings Bank posted a profit after tax of 9.6 billion rupees for 2017.

* Philippine National Bank's consolidated net profit rose year over year to 8.20 billion pesos from 7.20 billion pesos.

In other news

* The proposed sale of troubled Indian steelmaker Bhushan Steel Ltd. is credit positive for the country's banks as it will help improve their asset quality metrics, Moody's said.

* Meanwhile, the Reserve Bank of India and the Insolvency and Bankruptcy Board of India signed a memorandum of understanding to better implement the country's insolvency and bankruptcy law.

* BDO Unibank Inc. unit One Network Bank Inc. (a Rural Bank) will exit from its trust and other fiduciary business as it surrendered its trust license.