* China's State Council lifted restrictions on foreign investments in the banking and insurance sectors as part of its pledge to open up the market. Effective Oct. 15, foreign banks will no longer need permission before conducting renminbi businesses and will be permitted to underwrite government bonds, among others. Foreign insurance groups will be allowed to establish insurance companies in China, and overseas financial institutions will be allowed to become shareholders in these companies.
* China further cut the reserve requirement ratio of targeted city commercial banks by one percentage point to release 100 billion yuan in liquidity into the market, the Securities Daily reported. The regulator will reduce the ratio by 0.5 percentage point on Oct. 15 and will cut it by another 0.5 percentage point on Nov. 15.
* Citigroup Inc. plans to set up a wholly owned securities business in China, Bloomberg News reported, citing people familiar with the matter. The New-York based bank has not made a final decision on the matter, but could apply for a futures license in the first half of 2020, according to the report.
* The People's Bank of China granted a settlement agent license to Singapore's DBS Group Holdings Ltd. to trade, settle and provide custody for China's interbank bond market instruments on behalf of foreign investors. Further, the Monetary Authority of Singapore and the Chinese central bank will set up a cooperation mechanism that will allow designated banks in Singapore and China to offer custody and trading services for regional and global investors in China's bond market.
JAPAN AND KOREA
* Japan's SBI Holdings Inc. formed a new entity with information technology company NEC Corp. to develop a system utilizing blockchain technology to help prevent money laundering and other illegal transactions, The Nikkei reported. SBI subsidiary SBI Security Solutions will own 66% of the new company, while NEC will hold 34% of the company's shares. The new system will be offered to financial institutions and other businesses.
* Matsumoto Shinkin Bank signed a framework agreement with general insurers Mitsui Sumitomo Insurance Co. Ltd. and Sompo Japan Nipponkoa Insurance Inc. to promote the United Nation's sustainable development goals to its clients, The Nikkei reported.
* South Korea's Financial Services Commission said it received applications from three groups to obtain a license for a purely online bank, The Korea Herald reported. The first consortium is led by Viva Republica Co Ltd. and involves KEB Hana Bank, Hanwha Investment & Securities Co. Ltd. and Standard Chartered PLC. The second consortium is led by an industry organization of Seoul small business owners, while the third consortium consists of five people. A decision is expected in December.
* South Korea is allowing securities companies with an equity capital of three trillion won to provide loans to their overseas units, BusinessKorea reported.
* The International Monetary Fund cut its growth projection for Indonesia to 5% in 2019 and 5.1% in 2020, from its previous estimates of 5.2% in both years due to increasing global trade tensions, The Jakarta Post reported.
* PT Bank MNC Internasional Tbk appointed Ricko Irwanto as compliance director during its shareholders' general meeting, Bisnis Indonesia reported.
* Vietnam Prosperity JSCB repurchased 24.7 million shares, or 49.5% of the registered amount, from Oct. 2 to Oct. 11, Viet Nam News reported. The bank funded the buyback from undistributed profits. The lender needs to buy back an additional 25.3 million shares as part of its plan to repurchase 50 million shares in October, or 2% of its charter capital.
* The Philippine central bank reduced the reserve requirement rate for bonds issued by banks to 3%, lower than the required 4% for long-term negotiable certificates of deposits. The move aims to lower bond issuers' intermediation cost that could be passed on to bond holders, Bangko Sentral ng Pilipinas said in press release.
* India-based Karnataka Bank Ltd. reported a net profit of 1.06 billion rupees for the quarter ended Sept. 30, down from 1.12 billion rupees in the year-ago period. Net income in the second quarter was 19.38 billion rupees, up from 16.54 billion rupees year over year. However, net nonperforming assets rose to 18.63 billion rupees from 14.98 billion rupees a year ago.
* During a meeting with the chiefs of state-run banks, Reserve Bank of India Governor Shaktikanta Das urged banks to transfer lower policy rates to consumers with reference to the central bank's latest rate cut, Mint reported, citing the head of a state-owned lender. The central bank chief also discussed debt restructuring for the country's troubled small businesses.
* India's Department of Posts will launch a mobile banking service for customers with post office savings accounts from Oct. 15. Customers will be able to make some types of fund transfers from post office savings accounts.
* India's Yes Bank Ltd. divested a 6.56% stake in Fortis Healthcare Ltd. for about 6.45 billion rupees, the Press Trust of India reported. The bank sold 49,519,990 shares in the healthcare company and now holds 1,850 shares. The average price for the sale was 130.27 rupees per share.
AUSTRALIA AND NEW ZEALAND
* Australia & New Zealand Banking Group Ltd. estimates that it would take a A$2.5 billion charge, or reduction in its common equity Tier 1 ratio by 75 basis points, as a consequence of the Australian Prudential Regulation Authority's proposed changes in capital rules for banks. Westpac Banking Corp. expects the proposed rules to reduce its capital by A$1.6 billion, or a reduction in CET 1 ratio by 40 basis points. Commonwealth Bank of Australia said that on a pro-forma basis,its CET1 ratio would decline by 30 basis points if the Reserve Bank of New Zealand's reforms necessitates a NZ$3 billion capital injection into its New Zealand-based unit ASB Bank Ltd. National Australia Bank Ltd. meanwhile said that it anticipates only a minimum impact from the proposed changes.
* Australia's Latitude Financial Services Ltd's IPO has reportedly been called off after its bookbuilding because demand from long-term investors had not materialized, according to The Australian. Latitude Financial had previously priced down its IPO to A$1.78 per share, below the A$2-per-share price set by its owners.
* Wayne Byres, chairman of the Australian Prudential Regulation Authority, backed a planned inquiry on how banks price loans, The Australian Financial Review reported. The regulator, however, warned against backward-looking inquiries, which could distract banks from resolving technological disruptions and preparing for an expected prolonged period of very low interest rates.
IN OTHER PARTS OF THE WORLD
Middle East & Africa: Mashreqbank gets new chairman, CEO; Absa's CIB unit eyes China office
Europe: Dutch banks need €3B; Woodford fund shut down; Italy may cut bank loss tax help
Latin America: PagSeguro launches follow-on offer; Banco Security names new CEO
North America: JPMorgan posts YOY Q3 net income growth; Citi eyeing securities unit in China
Global Insurance: UnitedHealth's Q3 earnings top $5B; Hagibis claims projection; Voce targets Argo
Janna Estares, Sally Wang, Sarun Saelee, Cathy Hwang, Emi White and Aditya Suharmoko contributed to this report.
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