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 may require a subscription.
APRA seeks to limit contagion risks among banks and other regulatory actions
* The Australian Prudential Regulation Authority is reducing the allowable exposure of banks and other authorized deposit-taking institutions to related entities, in a move that aims to curb contagion risks in these institutions. APRA slashed banks' exposure limit to a related entity to 25% of Tier 1 capital from the current 50% of total capital, and cut the limit on aggregate exposure to all related entities to 75% of Tier 1 capital from 150% of total capital.
* Bank Indonesia cut its benchmark interest rate by 25 basis points for the second time in two months, to 5.50% as it seeks to lift economic growth and flagging inflation expectations. The committee also cut overnight deposit and lending facilities policy rates by 0.25%, to 4.75% and 6.25%, respectively.
* The People's Bank of China set the one-year loan prime rate at 4.25%, down 6 basis points from the previous LPR and lower than the official benchmark lending rate of 4.35%.
M&A corner
* Australia & New Zealand Banking Group Ltd. completed the sale of its 55% stake in joint venture ANZ Royal Bank (Cambodia) Ltd. to Japan's J Trust Co. Ltd. ANZ Royal Bank (Cambodia) was renamed J Trust Royal Bank Ltd.
* Japan's Sumitomo Mitsui Financial Group Inc. is acquiring London-based asset manager TT International in an acquisition that is expected to cost the bank around ¥20 billion, The Nikkei reported. The deal is set to close in the fiscal year ending March 31, 2020.
* Vietnam is looking to sell stakes in Vietnam Bank for Agriculture & Rural Development, Vietnam Posts and Telecommunications Group, Mobifone Corp. and 90 other state-owned companies by the end of 2020, Bloomberg News reported. The government wants to sell up to a 35% stake in the bank.
Earnings and guidance
* Postal Savings Bank of China Co. Ltd. recorded a 14.94% year-over-year increase in net profit for the six months ended June 30. The bank's net profit attributable to shareholders rose to 37.38 billion yuan from 32.52 billion yuan in the prior-year period.
* Hong Kong-based Bank of East Asia Ltd. reported a 74.9% year-over-year decline in net profit for the first half, primarily due to a significant increase in impairment losses. The bank's net profit fell to HK$1.00 billion from HK$3.99 billion in the year-ago period. The bank plans to shift resources to top-tier Chinese cities where asset quality is likely more resilient amid the country's economic slowdown, according to deputy CEO Brian Li, during an earnings briefing.
* Bank of Jinzhou Co. Ltd. expects a net loss of approximately 500 million yuan to 1 billion yuan for the six months ended June 30, compared to a net profit of 4.34 billion yuan in the prior-year period. The bank also expects a net loss of about 4 billion yuan to 5 billion yuan for the full year ended Dec. 31, 2018. The bank said the losses are mainly due to higher provision of impairments and increase in nonperforming assets.
Expansions and other operational updates
* United Overseas Bank Ltd. opened a branch in Hanoi, Vietnam, its first branch outside Ho Chi Minh City, The Straits Times reported.
* South Korea's Shinhan Financial Group Co. Ltd. set up a new subsidiary, called Shinhan AI. Co. Ltd., to provide artificial intelligence-based investment advisory services.
* Singapore's DBS Group Holdings Ltd. plans to launch credit card services in India by the second or third quarter of 2020, Reuters reported. The move is part of the group's efforts to tap growth outside its home market and to offset weakness of the local economy.
* Oversea-Chinese Banking Corp. Ltd. is in preliminary talks with Singtel and other companies for a minority stake in a virtual banking joint venture in Singapore, The Strait Times reported.
In other news
* India's Ujjivan Small Finance Bank Ltd.Ltd. is seeking to list its shares through a 12-billion-rupee IPO, The Hindu reported.
* Bank of Shanghai Co. Ltd. obtained approval from the China Banking and Insurance Regulatory Commission to increase its registered capital by around 30% to 14.21 billion yuan from 10.93 billion yuan.
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