The most read financial stories in S&P Global Market Intelligence's Asia-Pacific coverage over the past month include Australia's new bank tax, while editors' picks feature leaked communication between China's regulator and a midsize insurance firm.
1. S&P lowers ratings of 23 Australian financial institutions
S&P Global Ratings lowered its long-term issuer credit ratings on 23 Australian financial institutions by one notch due to increased economic imbalances in the country. The affected institutions include Bank of Queensland Ltd., Bendigo & Adelaide Bank Ltd. and AMP Bank Ltd. The rating agency also lowered its outlook on ING Bank (Australia) Ltd., among other rating actions.
2. Australia to impose tax on big banks, set up financial complaints authority
The Australian government introduced measures to impose a new, 0.06% tax on the country's five largest banks and set up a financial complaints authority as part of the federal budget for 2017-2018. The new tax is effective July 1 and will affect Commonwealth Bank of Australia, Australia & New Zealand Banking Group Ltd., Westpac Banking Corp., National Australia Bank Ltd. and Macquarie Group Ltd.
3. Moody's downgrades 4 Chinese insurers, affirms 6 following sovereign downgrade
Moody's lowered its ratings on four Chinese insurers after taking a similar action on China's ratings. The affected insurers are China Life Insurance Co. Ltd., PICC Property & Casualty Co. Ltd., CNPC Captive Insurance Co. Ltd. and China Railway Captive Insurance Co. Ltd.
4. Major Australian lenders expect A$965M hit from new levy
Four major Australian banks said the government's proposed levy is estimated to cost them about A$965 million after tax in the aggregate. Commonwealth Bank of Australia expects the additional tax to cost it A$220 million after tax annually, while ANZ estimates the after-tax impact of the levy to be A$240 million.
5. State Bank of India fiscal 2016-2017 net profit falls 98.0% YOY
State Bank of India posted a 98.0% year-over-year decline in net profit for the fiscal year ended March 31 as provisions increased. The bank reported a fall in consolidated fiscal full-year net profit after minority interest to 2.41 billion rupees, or 31 paise per share, from 122.25 billion rupees, or 15.95 rupees per share, in the prior-year period.
1. Chinese insurer's leaked documents highlight industry risks
Leaked communication between a midsize life insurance company and China's insurance regulator highlights growing liquidity pressure within the industry. Five sealed documents exchanged between Shenzhen-based Qian Hai Life Insurance Co. Ltd., the China Insurance Regulatory Commission and the regulator's Shenzhen bureau showed that Qian Hai Life, also known as Foresea Life, asked regulators for a reprieve from restrictions on selling new insurance products.
2. Mitsubishi UFJ seeks more acquisitions abroad in asset management, fund services
Mitsubishi UFJ Financial Group Inc. is looking to buy asset managers and fund administration companies outside Japan as part of its growth strategy. "We are very eager to expand our business. If we see good opportunities, we [will either take] full control or participate in a minority stake," said Eiji Ihori, managing executive officer and deputy CEO of the trust assets business unit at Mitsubishi UFJ Trust & Banking Corp.
3. China banks scale back interbank CDs as tighter rules loom
China's banks, which rely heavily on interbank lending, will likely feel the squeeze if the country's banking regulator begins clamping down on certificates of deposit that are seen to be fueling an unbridled extension of credit within the financial system. National regulators are looking to cut interbank lending, which has contributed to the Chinese economy's rising debt levels outpacing growth of the real economy.
4. No respite for Australian banks in conduct investigation
Regulators and politicians alike have been subjecting Australian banks to intense scrutiny for months after several cases of customers alleging fraud and malpractice, potentially posing reputational and financial risks for the lenders. That scrutiny does not appear to be going away anytime soon with the government launching a fresh inquiry as part of measures announced during the budget speech.
5. China's new cybersecurity law to hurt foreign companies, experts say
Foreign companies across a number of sectors, including financial services, will likely bear the brunt of a cybersecurity law coming into effect in China on June 1. The Cyberspace Administration of China, said the new law, unveiled in November 2016, aims to safeguard China's sovereignty in cyberspace and protect the data of individuals and organizations. Among other requirements, companies operating in China must now host their data on Chinese servers and seek the regulator's permission to transfer data offshore.
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