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M&A deals in India; China eases bank capital requirements

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M&A deals in India; China eases bank capital requirements

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.

M&A corner

* State Bank of India is looking to sell up to a 4.5% stake in insurance unit SBI Life Insurance Co. Ltd. The bank plans to sell 35 million shares with an option to sell a further 10 million shares. The floor price is set at 770 rupees per equity share.

* Canara Bank expects to fetch about 10 billion rupees from the sale of its stake in Can Fin Homes Ltd., and has attracted 12 bids from serious investors so far, Financial Express reported, citing the bank's managing director and CEO, R.A. Sankara Narayanan said. The Indian bank plans to sell its entire 29.99% stake in the housing finance company, or an equivalent of 39,930,365 shares.

* Paytm is in talks to acquire a stake in Yes Bank Ltd., Mint reported. Yes Bank Managing Director and CEO Ravneet Gill reportedly said that the bank is in advanced talks to sell a minority stake to a global technology company, according to a separate Mint report. Paytm is an India-based digital wallet company.

* Abu Dhabi Commercial Bank PJSC will sell majority of its Indian banking book to Mumbai-based DCB Bank Ltd. as it seeks to exit the country and focus on its operations in the United Arab Emirates. The portfolio, which comprises 355 million dirhams in assets and 601 million dirhams in liabilities, will be sold at par.

* Japan's SBI Holdings Inc. will invest about ¥2.5 billion in Shimane Bank Ltd. The bank will raise funds through a third-party allocation of shares, of which SBI and a regional bank revitalization fund will take a share of about 34%.

Regulatory, legal developments

* The People's Bank of China cut the reserve requirement ratio for all banks by 0.5 percentage points, effective Sept. 16, to boost tapering economic growth. The central bank will also cut the reserve requirement ratio by 1 percentage point for some city commercial banks, in a bid to support small and micro enterprises.

* China will scrap the limit on overseas funds buying domestic stocks and bonds as the world's second-largest economy continues opening its financial markets to foreign investors, according to the State Administration of Foreign Exchange. The regulator did not say when the new rule will become effective.

* Westpac Banking Corp. units BT Funds Management Ltd. and Westpac Life Insurance Services Ltd. are facing a class action lawsuit for allegedly not acting in the best interest of superannuation fund members and pocketing their returns.

Restructuring, branch expansions and more

* Mitsubishi UFJ Financial Group Inc. expects the planned merger of its two units, Mitsubishi UFJ Morgan Stanley Securities Co. Ltd. and Mitsubishi UFJ Morgan Stanley PB Securities Co. Ltd., to come into effect June 1, 2020. Under the deal, MUFG Bank Ltd. would transfer its 25% stake in Mitsubishi UFJ Morgan Stanley PB Securities to Mitsubishi UFJ Morgan Stanley Securities, tentatively on Oct. 25.

* Shizuoka Yaizu Shinkin Bank. plans to shutter 10% of its branches by 2022, The Nikkei reported. The move will bring the bank's branch count down to 63 from 70.

* Hiroshima Bank Ltd. plans to transform into a holding company structure with a view to become a regional comprehensive financial services group. The lender aims to complete the transformation by October 2020.

* Woori Bank Vietnam Ltd. received approval from the State Bank of Vietnam to open five more branches in the country, Yonhap News Agency reported. Woori Bank Vietnam will open new branches in Hanoi, Ho Chi Minh City, Danang, Bien Hoa and Vinh Phuc Province by April 2020.

* Woori Financial Group Inc. added Woori Card Co. Ltd. and Woori Investment Bank Co. Ltd. as its direct subsidiaries following the completion of separate share-swap transactions.

In other news

* Moody's said the Indian government's plan to consolidate 10 state-owned banks is credit positive for the banks. If the consolidation plan is implemented, it would result in increased operational scale and capital at the banks, and potentially lead to improved corporate governance in the longer term, Moody's said.

* Banque Pour Le Commerce Exterieur Lao Public's first half net profit rose 14% year over year to 232.98 billion Lao kip from 202.74 billion kip.

* Indian lender Punjab National Bank is selling 12.34 billion rupees worth of nonperforming assets, Business Standard reported. The bid will open on Sept. 21.

* Singapore's DBS Group Holdings Ltd. is seeking to boost its asset under management to S$300 billion by 2023 from about S$234 billion currently and is willing to consider mergers and acquisitions to hit the target, The Business Times reported.

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