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Westpac, NAB face lawsuits; Chinese bank seeks HK$5.74B in IPO

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 require a subscription.

2 major Australian banks' troubles

* Westpac Banking Corp. is facing a class action on behalf of certain shareholders who acquired the bank's shares between Dec. 16, 2013, and Nov. 19, 2019. The class action is related to market disclosure issues about the bank's monitoring of alleged financial crime over the period, as well as the allegations of money laundering against the bank by the Australian Transaction Reports and Analysis Centre, or AUSTRAC.

* In an unrelated case, the Federal Court of Australia ordered Westpac a penalty of about A$9.2 million for violations of the Corporations Act after one of its financial advisers failed to act in the best interests of his clients.

* Meanwhile, National Australia Bank Ltd. voluntarily reported shortcoming in its anti-money laundering systems to AUSTRAC almost a month following the watchdog filed its lawsuit against Westpac, Reuters reported. Theoretically, the bank could face fines of up to A$9.75 billion for the shortcomings, the outlet reported.

* Separately, National Australia Bank is facing a lawsuit from the Australian Securities and Investments Commission for allegedly charging customers for no service from December 2013 to February 2019.

Monetary policy decisions

* The People's Bank of China lowered the interest rate on 14-day reverse repurchase agreements to 2.65% from 2.70%, in a move that follows other easing measures in recent weeks.

* In line with market expectations, Bank of Japan kept its short-term monetary policy rate unchanged at negative 0.1%, saying it will continue expanding its monetary base until inflation exceeds its 2% target.

* The Bank of Thailand kept its policy rate unchanged at 1.25% and downgraded its economic growth projections through 2020 amid a slowdown in exports.

* Bank Indonesia held its seven-day reverse repo rate at 5.00%, and the deposit facility and the lending facility rates at 4.25% and 5.75%, respectively.

IPOs, capital raises

* Chinese city commercial lender Bank of Guizhou Co. Ltd. is looking to raise up to HK$5.74 billion through its planned IPO in Hong Kong. The bank is offering 2.2 billion shares at an indicative per-share price range between HK$2.46 to HK$2.61.

* India's Equitas Small Finance Bank Ltd. filed a draft red herring prospectus its proposed IPO of up to 5.50 billion rupees worth of fresh equity shares and an offer for sale of up to 80 million shares by its parent, Equitas Holdings Ltd.

* Meanwhile, HENGFENG BANK CO. Ltd. plans to issue 100 billion shares, in a private placement, to China's sovereign wealth fund Central Huijin Investment Ltd., Shandong Financial Asset Management Co. Ltd. and Singapore's United Overseas Bank Ltd.

In other news

* New Zealand is planning to launch a deposit insurance scheme and expand the central bank's remit to monitor lenders and hold their directors and executives more accountable for misdeeds as part of the second phase of its review of the Reserve Bank Act.

* Industrial & Commercial Bank of China Ltd., and Alibaba Group Holding Ltd. and its affiliate, Ant Financial Services Group, agreed to expand their existing partnership to key areas of financial technology and financial services, including electronic payment settlement, cross-border finance and scenario-based financial services.

* IDBI Bank Ltd. is discussing the potential sale of its stake in stressed assets collector Asset Reconstruction Co. (India) Ltd. to U.S.-based hedge fund Avenue Capital Group LLC, The Economic Times reported. The bank reiterated its plan to sell the stake but stopped short of confirming or denying newspaper's report.

* Australia & New Zealand Banking Group Ltd. expects a roughly A$3 billion increase in common equity Tier 1 capital by July 2027 after the Reserve Bank of New Zealand imposed higher capital requirements for banks in the country.

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