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Ex-China banking regulator sentenced to prison; Banks post higher Q2 profits

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.

Legal and regulatory developments

* Yang Jiacai, a former assistant chairman of the China Banking Regulatory Commission, was reportedly sentenced to 16 years in prison for accepting bribes.

* China's foreign exchange regulator fined 27 companies and individuals, including 13 banks, over violations of foreign exchange rules.

* The Monetary Authority of Singapore asked all financial institutions in the country to tighten their customer verification processes following a recent cyberattack at Singapore Health Services.

* The China Foreign Exchange Trade System will allow qualified trading members to use offshore bonds denominated in seven foreign currencies as collateral for interbank loans, in a bid to diversify foreign exchange financing tools and open up the country's capital markets.

* Vietnam's Finance Ministry is proposing new rules for weak credit institutions that would place them under special control during their restructuring process.

Earnings corner

* South Korea-based Shinhan Financial Group Co. Ltd. and Hana Financial Group Inc. both reported a year-over-year increase in their respective net profits for the quarter ended June 30.

* India's Canara Bank and HDFC Bank Ltd. saw their respective fiscal first-quarter net profits rise year over year.

* Krung Thai Bank PCL's net profit for the second quarter more than doubled year over year to 7.71 billion baht from 3.22 billion baht.

* Joint Stock Commercial Bank for Foreign Trade of Vietnam, or Vietcombank, reported a 45.1% year-over-year increase in second-quarter net profit to 2.932 trillion dong from 2.021 trillion dong.

Moody's assessments

* The higher home loan rates in Australia are credit positive for small- and mid-sized banks in the country, which have shown they retain pricing power independent of challenges facing the major lenders, Moody's said.

* The Indian government's plan to inject a total of 113.36 billion rupees into five state-run banks is credit positive and will strengthen the lenders' capitalization, Moody's said.

* HDFC Bank Ltd.'s capital increase of 85 billion Indian rupees through an issue of equity shares to parent Housing Development Finance Corp. Ltd. is credit positive for the bank, Moody's said.

Deal news

* Australia & New Zealand Banking Group Ltd. entered into a nonbinding term sheet to transfer an 82% stake in its pension and investments business, as well as the ownership of its aligned dealer groups business, to IOOF Holdings Ltd.

* India's ICICI Bank Ltd. will purchase a 9.91% stake in Arthashastra Fintech Pvt. Ltd. for a cash consideration of 82.72 million Indian rupees.

Expansion plans

* Bank of China Ltd. is seeking approval from the Peruvian banking regulator SBS to set up a new unit, which will be called Bank of China (Perú), in the South American country.

* India's Federal Bank Ltd. secured approval from the Reserve Bank of India to open representative offices in Bahrain, Kuwait and Singapore.

* Meanwhile, Allahabad Bank proposed to shutter its Hong Kong branch as part of a rationalization of its offshore operations.

* Commercial Bank of Ceylon PLC unit CBC Myanmar Microfinance Co. Ltd. commenced operations July 16.

In other news

* South Korean internet-only bank KakaoBank of Korea Corp. is preparing for an IPO in 2020 to expand capital.

* Industrial & Commercial Bank of China Ltd., Agricultural Bank of China Ltd. and Bank of China agreed to support the government's initiative to set up National Financing Guarantee Fund Ltd., with each lender taking a stake in the fund.

* About 17 state-run Indian banks, including Union Bank of India, Bank of Baroda and Punjab National Bank, signed an intercreditor agreement to accelerate the resolution of stressed assets.

* Bank of China plans to partner with 15 Philippine banks to make international yuan transaction more convenient and cost efficient for Philippine companies through a peso-yuan spot market.

* PT Bank Bukopin Tbk said it is not selling its nonperforming loans to PT Bank DKI.