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HSBC unit fined over Lehman-linked products; Mitsubishi UFJ to cut workforce

Banking Essentials Newsletter - November Edition

Online Brokerage Space Should Remain Rich Source Of M&A

University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts

Estimating Credit Losses Under COVID-19 and the Post-Crisis Recovery


HSBC unit fined over Lehman-linked products; Mitsubishi UFJ to cut workforce

GREATER CHINA

* HSBC Private Bank (Suisse) SA, the Hong Kong branch of HSBC Group's Swiss private banking business, was fined HK$400 million by the city's Securities and Futures Commission after losing its appeal against a 2015 ruling for misconduct in selling products linked to the now-defunct Lehman Brothers Holdings Inc. The bank will have its license to advise on securities suspended and its license to deal in securities partially suspended, each for a period of one year.

* A Chinese government body tasked to curb risks in the online finance sector urged provincial governments to suspend regulatory approval of new internet microlenders, Reuters reported, citing a notice seen by the news agency. The body also told local regulators to restrict the granting of new approvals for microloan companies to conduct lending across regions, sources said.

* The People's Bank of China said the country's credit card business has been growing rapidly, with a total of 520 million credit cards issued as of the end of the second quarter, Securities Daily reported. A survey in September found that 71.4% of the issued credit cards were in use as of the end of 2016.

* Moody's said the People's Bank of China's expansion of the medium-term lending facility and pledged supplementary lending in 2017 enhanced the central bank's monetary management, as the facilities allowed the central bank to communicate a longer term view on its liquidity provision, leading to an increased predictability for market participants, including banks.

JAPAN AND KOREA

* Japan's Mitsubishi UFJ Financial Group Inc. said it would lose about 6,000 of more than 40,000 positions in Japan by March 2024 through natural attrition and greater use of technology, Agence France-Presse reported.

* Sumitomo Mitsui Financial Group Inc. unit Sumitomo Mitsui Banking Corp. is expected to open private customer-only branches focusing on advisory services in asset management and successions in early 2018, The Nikkei reported.

* Japan-based Nomura Holdings Inc. will collaborate with Indian startups to build innovative solutions for capital markets and investment banking, Kyodo News Agency reported.

* Rakuten Securities Inc., a Japanese online securities company, will lower commission fees for domestic stock trades to the lowest level in the industry, The Nikkan Kogyo Shimbun reported. The company will implement the new fee schedules by Dec. 25.

* Japan's Monex-Saison-Vanguard Investment Partners will introduce an asset management service in Shizuoka Bank Ltd., which will utilize a robot adviser, or a computerized investment analysis system, The Nikkan Kogyo Shimbun reported.

* Virtual currency platforms in South Korea experienced technical issues on Nov. 21 due to excessive traffic inflow following the introduction of a new type of transaction service, the Seoul Business Newspaper reported.

* Industrial Bank of Korea entered into a memorandum of understanding with 24 government-owned science and technology research institutions to affirm its five-year support plan worth 100 billion won for the country's small and medium-sized enterprises, starting in 2018, the Korea Economic Daily reported.

ASEAN

* Thailand's TMB Bank PCL opened 15 "digital branches" to improve customer experience through digital banking services, Manager Daily reported. The bank intends to have all of its 120 branches transformed by mid-2018 to incorporate digital technology into its services.

* Thailand-based Bank for Agriculture & Agricultural Co-operatives signed a memorandum of understanding with The Transport Co. Ltd. and Thai Agri Business Co. Ltd. to create a new distribution channel where farmers can directly sell their products to consumers, Manager Daily reported.

* Government Savings Bank will offer 10 billion Thai baht in loans, aimed at encouraging low-earners to get jobs and escape poverty, the Bangkok Post reported, citing Chatchai Payuhanaveechai, the bank's president and CEO. Each borrower will be eligible to apply for up to 50,000 baht in occupation loans, but is required to participate in job training that will be provided by the bank, he said.

* Indonesian private lender PT Bank OCBC NISP Tbk remains confident that loan growth for full-year 2017 will be between 10% and 15%, Infobank reported, citing CEO Parwati Surjaudaja. As of the third quarter, the bank posted loan growth of 17%.

* Three Indonesian state banks — PT Bank Mandiri (Persero) Tbk, PT Bank Rakyat Indonesia (Persero) Tbk and PT Bank Negara Indonesia (Persero) Tbk — will cooperate with six state companies to help distribute electronic data capture, or EDC, machines to remote areas, Bisnis Indonesia reported. The state companies include train company PT Kereta Api Indonesia and postal service PT Pos Indonesia.

* The Malaysian Institute of Economic Research revised its full-year GDP growth forecast for the country to 5.6% from 5.4% due to strong domestic demand, The Sun Daily reported.

* The Monetary Authority of Singapore may force large lenders in the country to open up their payment rails to competitors and third-party players to ensure compatibility in payment systems, The Straits Times reported. The regulator separately said it launched a second consultation on its proposed payments regulatory framework, called the Payment Services Bill, which will, among other things, streamline the regulation of payment services under a single legislation.

SOUTH ASIA

* The Securities and Exchange Board of India requested trading data on 12 companies mentioned in a Nov. 17 Reuters report about company earnings being circulated on social media groups before they were made public, Reuters reported, citing "a person familiar with the matter." Among the companies mentioned are Axis Bank Ltd., HDFC Bank Ltd. and Bajaj Finance Ltd.

* The Indian government raised 145 billion rupees through the Bharat 22 exchange-traded fund, Press Trust of India reported, citing Neeraj Gupta, secretary of the country's department of investment and public asset management. The ETF received bids of nearly 320 billion rupees, with foreign institutional investors bidding for one-third of the amount.

* India-based Canara Bank said it will monetize noncore assets by selling stakes in its units, Canara Robeco Asset Management Co. Ltd., Canbank Computer Services Ltd. and Can Fin Homes Ltd. The move is aimed at improving the bank's capital base for further business growth.

* India's Paytm Payments Bank Ltd. invested in lending startup CreditMate for an undisclosed sum, Mint reported. Under the agreement, Paytm will use CreditMate's proprietary credit and asset valuation technology to create a loan management system.

* India-based YES BANK Ltd. said it was raising US$400 million via two syndicated loan transactions in Taiwan and Japan. The loans comprise US$250 million from Taiwanese lenders and ¥16.5 billion from Japanese banks.

* Reliance Capital Ltd. raised 25 billion Indian rupees from banks and financial institutions for debt refinancing, Press Trust of India reported, citing "people aware of the matter." The funds were raised through term loan and nonconvertible debentures, which will mature in five to seven years.

AUSTRALIA AND NEW ZEALAND

* Reserve Bank of Australia Governor Philip Lowe said interest rates would likely go up eventually if the economy continues to improve, though a monetary policy adjustment in the near term looks unlikely. GDP growth is expected to pick up to average "a bit above" 3% over 2018 and 2019, Lowe noted.

* Australian Prime Minister Malcolm Turnbull dismissed reports that he and his cabinet discussed reversing their policy on the banking inquiry issue, The Australian reported. Turnbull added that the government opposed a banking royal commission because it would be long and expensive.

* Andrew Matthews, a former banker at National Australia Bank Ltd., appeared before the Melbourne Magistrates Court on charges of defrauding more than A$800,000 from the lender between November 2011 and June 2016, The Sydney Morning Herald reported. NAB said it fired Matthews in July 2016 when they discovered his actions, and that his case was separate from the Nov. 16 announcement of employees being fired over home-loan rule violations.

* The owners of Latitude Financial Services, an Australian credit card and personal loan business, intend to hire three joint lead managers for its proposed IPO, The Australian Financial Review's Street Talk blog reported. Latitude is said to be the biggest IPO contender for 2018, with a market value estimated at about A$5 billion.

IN OTHER PARTS OF THE WORLD

Middle East & Africa: Sudan to limit forex outflows; Fitch lowers Namibia; Saudi insurance M&A ahead

Europe: Paris wins European Banking Authority; HSBC closes Gupta accounts

Latin America: Davivienda Q3 profit falls; Chile election headed for runoff

North America: Citi falls in FSB's G-SIB ranking; Royal Bank of Canada joins the list

North America Insurance: MetLife, US resume legal battle over SIFI label; CEA cat bond pricing finalized

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

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