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Australia to relax rules on mortgage lending; India eyes merger of 4 banks

S&P Global Market Intelligence offers our top picks of banking news stories and more published throughout the week. Please note that some entries have links to third-party sources that may require a subscription.

Australia to relax mortgage guidelines, other regulatory news

* The Australian Prudential Regulation Authority has proposed to relax its guidance on how banks assess their mortgage customers' ability to manage their repayments. The move is expected to increase the maximum borrowing capacity for a given borrower.

* The Reserve Bank of India decided to create a specialized supervisory and regulatory team for commercial banks, urban cooperative banks and nonbanking financial companies in an effort to improve the supervision and regulation of financial institutions in the country.

* The Indian central bank also asked large nonbanking financial companies in the country with over 50 billion rupees in assets to appoint chief risk officers. The central bank added that NBFCs need to strengthen their risk management practices given their growing role in direct credit intermediation.

* The People's Bank of China plans to lower the reserve requirement ratio for rural commercial banks in three stages. The central bank said it has cut the ratio by 100 basis points on May 15, and will make further reductions on June 17 and on July 15.

* The Philippine central bank ordered the closure of two more rural banks. Bangko Sentral ng Pilipinas shuttered Valiant Bank Inc. (A Rural Bank) and Rural Bank of Basey (Samar) Inc.

* The State Bank of Pakistan raised its policy rate by 150 basis points to 12.25% from 10.75%, effective May 21, citing inflationary pressures, recent currency depreciation and potential adjustments in utility tariffs.

M&A corner

* Punjab National Bank could merge with two to three state-run banks as the Indian government looks to trim the number of lenders in the country, Reuters reported.

* ICICI Bank Ltd. will acquire a 9.9% stake in BSE Ltd. unit India International Exchange Ltd. for 305.0 million rupees in cash.

Operations and services updates

* Australia-based Westpac Banking Corp. has decided to exit the mortgage business in Singapore, reported. The bank will unwind its investment property loan book in Singapore, as well as in Hong Kong, after taking into account commercial and strategic factors.

* Credit Suisse Group AG has set up a division offering family office services to high-net-worth clients in Greater China, Reuters reported.

* Japan's Mizuho Financial Group Inc. decided to restrict financing for new coal-fired power projects starting July 1 to address environmental issues, Reuters reported. The bank will only finance projects in line with international guidelines and plants that use ultra-supercritical or more advanced technology.

* Australia & New Zealand Banking Group Ltd. will phase out its Prime Access financial advice service for existing customers over the next 18 months. ANZ is taking a new approach to providing customers ongoing advice.

In other news

* Japan's Norinchukin Bank posted a 29.8% year-over-year decline in profit for the fiscal year ended March 31 amid a rise in expenses.

* Bank of Baroda posted a stand-alone net loss of 9.91 billion Indian rupees for the fiscal fourth quarter ended March 31, narrowing from a net loss of 31.02 billion rupees in the prior-year period.

* Five current and former officials of Manila-based Rizal Commercial Banking Corp. were charged with money laundering in connection with the cyber theft of US$81 million from Bangladesh Bank accounts in 2016, BusinessWorld reported. The five officials, including the bank's treasurer Raul Victor Tan, were "instrumental" in lifting the temporary hold order that allowed the funds stolen from Bangladesh Bank to be transferred from four accounts to various casinos.

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