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China Guangfa Bank fined over lending violations; ICICI unit picks banks for IPO

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China Guangfa Bank fined over lending violations; ICICI unit picks banks for IPO

* The China Banking Regulatory Commission fined China Guangfa Bank Co. Ltd. US$109 million for its involvement in a series of defaults by Chinese electronics maker Cosun Group in 2016, which amounted to more than 1 billion yuan, The Wall Street Journal reported, citing a statement from the regulator. The regulator said the bank provided illegal guarantees to conceal operating losses and nonperforming assets to benefit the client.

* The China Banking Association denied reports that 10 banks have sent a joint petition opposing changes to asset management rules, Caixin reported. The association said regulatory officials will fully consider the draft regulations' influence on the banking industry and the market before finalizing the rules.

* China-based ZhongAn Online Property & Casualty Insurance partnered with Hong Kong-listed Sinolink Worldwide Holdings Ltd. to form an offshore arm which will increase the insurer's investments in financial and insurance technology internationally, the South China Morning Post reported.

* Zeng Hui, an official from the People's Bank of China's financial market department, said the country had issued more than 3 trillion yuan worth of asset-backed securities as of the end of October, of which 1 trillion yuan was issued in 2017, National Business Daily reported.

* Taiwan's Financial Supervisory Commission approved new guidelines on collaborations between peer-to-peer lending platforms and commercial banks, in a bid to support the development of financial services, the Taipei Times reported. The new guidelines let banks provide custodian and trust account services to P2P platforms, and also permits them to provide transaction services for these platforms since Taiwan prohibits the collection of deposits by nonbank entities, the report added.

JAPAN AND KOREA

* Mitsubishi UFJ Trust & Banking Corp. said it will withdraw from the home loans business at the end of March 2018, and will instead offer mortgages as a loan agency of affiliate Bank of Tokyo-Mitsubishi UFJ Ltd., The Nikkei reported.

* Bank of Japan Deputy Governor Hiroshi Nakaso warned of systemic risks posed by weak local financial institutions, saying that low profitability and intense competition among institutions would create an unprecedented financial vulnerability, The Nikkei reported.

* South Korea's two financial regulators plan to establish an "innovation committee" or a joint supervision system which will be utilized to improve oversight of the country's financial companies and study potential revision of related financial laws to keep them up to date, The Financial News reported.

* Industrial Bank of Korea will implement a fully electronic document system before the end of 2017 and will replace all paper-based documents with digital forms, with tablet PCs to be installed in all branches, the Yonhap News Agency reported. The bank expects the move to reduce costs by 4.5 billion South Korean won.

ASEAN

* Thailand's Ministry of Finance announced that health insurance premiums paid from Jan. 1, 2017, and onward, can be tax deductible for up to 15,000 baht per year, Post Today reported. The total deductions for both health insurance and life insurance premiums, however, must not exceed 100,000 baht.

* The number of bank branches in Thailand was down to 6,800 in November from 7,004 in January, Post Today reported, citing the Bank of Thailand. Krung Thai Bank PCL closed 91 branches, the highest number of closures among four other banks which reduced their branches in 2017.

* Malaysia's AmBank (M) Bhd. aims to be the top three premier bank in the country by 2020 and wants to grow its priority banking segment to account for 15% of its revenue for retail banking in three years, The Sun reported, citing group CEO Sulaiman Mohd Tahir.

* The Philippine Stock Exchange Inc. clarified that talks about possible tie-ups between the stock exchange and the Shenzhen bourse are only preliminary at this stage. The stock exchange was responding to reports regarding the possible partnership after Shenzhen Stock Exchange Director Liu Fuzhong was quoted by newspapers as saying that "there is a very strong consensus that two capital markets should be working together."

SOUTH ASIA

* Fairfax Financial Holdings Ltd. unit Fairfax India Holdings Corp. may raise up to US$1.5 billion through debt, other forms of security or equity, over a course of 25 months as it looks to increase its investment in India, DealStreetAsia reported. The company filed a prospectus with the Canadian securities regulatory authorities for the planned capital raising.

* ICICI Bank Ltd. unit ICICI Securities Ltd. picked Bank of America Corp. and Citigroup Inc. as arrangers for its planned IPO, which is expected to value the company at more than 200 billion Indian rupees, Bloomberg News reported, citing "people familiar with the matter." The company could sell the shares as early as the first quarter of 2018.

* Axis Bank Ltd. said its shareholders approved a plan to raise 116.26 billion Indian rupees from marquee investors, including affiliates of Bain Capital Pvt. Equity LP and Life Insurance Corp. of India, through share and warrant sales.

* State Bank of India will change the names and Indian Financial System Code codes of approximately 1,300 branches after its absorption of five associate banks, Press Trust of India reported, citing the bank's managing director for retail and digital banking, Praveen Gupta.

AUSTRALIA AND NEW ZEALAND

* The Australian Prudential Regulation Authority and the Australian Securities and Investments Commission are looking into the effects of recent rule changes regarding interest-only loans on major lenders' loan books, The Australian Financial Review reported. The regulators have forwarded queries to the banks regarding the matter.

* Wayne Byres, chairman of the Australian Prudential Regulation Authority, said he was pleased with the finalization of the Basel III bank capital framework by the Basel Committee on Banking Supervision, and feels confident that local banks are ready to comply with the changes. The reforms will be implemented beginning 2022.

* Some Australian superannuation funds are bringing their management teams in-house due to higher investment management costs over the past year, The Australian reported, citing an analysis of annual reports. Investment management expenses at some of these funds jumped to as high as 44%, and were often ahead of growth in funds under management.

Janna Estares, Sally Wang, Sarun Saelee, Cathy Hwang, Emi White and Aditya Suharmoko contributed to this report.

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