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HK regulator slashes bank buffers; ASIC to clamp down on financial products


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HK regulator slashes bank buffers; ASIC to clamp down on financial products


* Hong Kong Monetary Authority chief executive Eddie Yue said the regulator slashed the countercyclical capital buffers for banks to 2% from 2.5%, which would allow banks to pour out an extra HK$200 billion to HK$300 billion in credit. Yue added that the city-state's "banking system is robust and sound" and is "well positioned to withstand market shocks." Yue made the comments to address rumors regarding Hong Kong's financial stability.

* Paris-based Société Générale SA called off its plan for a securities joint venture in China in favor of a wholly owned subsidiary in an effort to avoid future stake transfers, Reuters reported, citing Xin He, the bank's head of global markets for China. The move comes as Chinese regulators announced plans to lift foreign ownership limits in its financial industry by the end of 2020.

* China Cinda Asset Management Co. Ltd. is selling an approximately 51% stake in Happy Life Insurance Co. Ltd. for a base price of 7.5 billion yuan on the Shanghai United Assets and Equity Exchange, the Securities Times reported. The asset manager intends to off-load all its 5.17 billion shares in the life insurer.


* Typhoon Hagibis, which hit Japan on Oct. 12, "is expected to produce a large volume of commercial insurance claims" stemming from wind, rain, flooding and storm surge, according to global loss adjuster Sedgwick. In addition to property and business interruption losses, Sedgwick also expects contingent business interruption losses because of disruption to supply chains. Separately, Bloomberg Intelligence analyst Steven Ram estimated that insurance claims could reach ¥540 billion to ¥1.8 trillion as a broad area of the country has been affected.

* South Korean digital bank KakaoBank of Korea Corp. is planning to raise 500 billion won in capital via the issuance of new stocks in November, The Korea Times reported, citing unnamed sources. The bank will finalize its capital raising plan in a board meeting in October. The move follows a decline in the lender's cash reserves, according to the report.

* South Korea's Shinhan Bank Co. Ltd. said it signed a memorandum of understanding with technology company Naver Search & Clova to strengthen cooperation on building artificial intelligence for the financial market, the Maeil Business Newspaper reported.


* Indonesian private lender PT Bank Central Asia Tbk is considering a stock split in 2020, Bisnis Indonesia reported, citing CEO Jahja Setiaatmadja. The bank remains the largest private lender in Indonesia, with assets of 870.45 trillion rupiah as of June.

* German insurer HDI Global SE will increase its stake in Vietnam's PetroVietnam Insurance to 42.78% from 41.05% by purchasing 4 million additional shares, Viet Nam News reported. The transaction has a value of 128 billion dong and will be carried out by Nov. 12. HDI Global is the largest stakeholder in the Vietnamese insurer.

* The Bank of Thailand is considering giving out individual banking agent licenses for basic financial transactions such as cash withdrawals, loan withdrawals and bills payments, the Bangkok Post reported, citing a consultation paper from the central bank. Prospective applicants would have to meet service points and systems requirements. The central bank believes this measure will cut down on informal transactions and widen access to financial services.

* The Bank of Thailand will bring state banks and nano-finance firms under the umbrella of its market conduct oversight, The Nation reported, citing Jaturong Jantarangs, assistant governor for a supervision group.


* Indian digital payments firm Paytm is reportedly close to raising US$2 billion from existing investors at a pre-money valuation of US$15 billion, Mint reported, citing a source close to the matter. The report also said that the payments company might consider an IPO after its expected positive cash flow in 2021, quoting Paytm founder Vijay Shekhar Sharma.

* Troubled Indian lender Altico Capital India Ltd. could propose selling some of its biggest loan assets and raising equity from an unrelated set of investors as part of a resolution plan that will be presented to its creditors this week, The Economic Times reported, citing two sources aware of the plans. The asset sales could fetch at least 20 billion rupees, according to market sources.

* The Reserve Bank of India fined Lakshmi Vilas Bank Ltd. 10 million rupees for noncompliance with certain provisions on asset classification. Separately, the central bank fined Syndicate Bank Ltd. 7.5 million rupees for noncompliance with fraud classification and housing loan disbursal rules.

* Indian Bank will seek customer feedback on its proposed merger with Allahabad Bank, the Press Trust of India reported, citing Padmaja Chunduru, CEO of Indian Bank. Allahabad Bank is also expected to set up a similar consumer feedback system for its clients.


* The Australian Securities and Investments Commission has decided to implement measures to make financial companies jettison products that are too complex, and provide simpler advice, under the regulator's product intervention powers, The Australian Financial Review reported. This follows a joint study by the Australian regulator and the Netherlands Authority for the Financial Markets on product disclosure statements.

* The AMP Financial Planners Association has engaged law firm Corrs Chambers Wesgarth as it considers legal action against AMP Ltd., The Australian Financial Review reported, citing a letter from the association's chief executive, Neil Macdonald. The law firm is reportedly considering a class action lawsuit against the financial services company for cutting business ties and proposing a buyback agreement.

* The Insurance Council of Australia is expected to announce a new industry code of practice later in October, The Australian reported, citing the industry organization's spokesperson Campbell Fuller. The code is subject to approval by the council's board and the Australian Securities & Investments Commission and is slated to go live in 2020. The industry organization has also opened up talks with the Treasury on legislation based on recommendations of the Hayne commission.

* WAM Active Ltd. proposed to launch a takeover bid to buy all issued shares of Keybridge Capital Ltd. at 6.9 Australian cents per share. Bentley Capital Ltd., which owns 31.7 million shares in Keybridge, said it reviewed the offer and plans to accept it in the absence of a superior proposal. Keybridge advised its shareholders to take no action in relation to the offer at this stage.


Middle East & Africa: Standard Bank, Stanlib merge index-tracking arms; Equity Bank taking over loans

Europe: Barclays execs' 'misleading audit trail;' Deutsche to end Malta relationships

Latin America: 7 banks in hot water for Mexico bond market manipulation; Banco XP gets license

North America: Facebook's Libra loses backers; California CUs call off proposed merger

Global Insurance: Michael insured losses breach $7B; Hagibis hits Japan; Berkshire unit deal

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

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