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RBA chief warns of global political shock; India to inject cash into banks again

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RBA chief warns of global political shock; India to inject cash into banks again

* Reserve Bank of Australia Governor Philip Lowe warned that central banks have limited capacity to protect the global economy from major political shocks, The Guardian reported. At a retreat for central bankers in the U.S., Lowe also said investments in infrastructure and structural reform in economies around the world could be more effective in boosting growth than cutting interest rates.

GREATER CHINA

* The People's Bank of China said banks shall use the loan prime rate, instead of the benchmark interest rate, as the reference rate for private-housing mortgages from Oct. 8. The loan prime rates, which are refreshed monthly, should reflect market demand more accurately, the central bank added.

* Ping An Insurance (Group) Co. of China Ltd. could absorb Lufax if the financial technology arm fails to go public, Caixin reported, citing sources with the knowledge of the matter. This plan intends to offer an exit opportunity for Lufax investors such as UBS Group AG and Qatar's sovereign wealth fund.

* China Pacific Insurance (Group) Co. Ltd.'s first-half net profit surged 96.1% year over year to 16.18 billion yuan from 8.25 billion yuan. EPS was 1.79 yuan, up from 91 fen a year earlier.

* Shanghai Pudong Development Bank Co. Ltd. plans to issue no more than 50 billion yuan of perpetual bonds to replenish Tier-1 capital.

* Bank of Chengdu Co. Ltd. has issued 10.5 billion yuan worth of 10-year Tier-2 capital bonds at a nominal interest rate of 4.55%.

JAPAN AND KOREA

* Japan and the U.S. agreed on a broad trade deal which covers American beef and pork and Japanese autos, following three days of talks in Washington, the Nikkei reported. If an agreement is signed in late September, it will be voted in Japan's parliament in the fall.

* Mizuho Bank Ltd. will invest ¥19.2 billion into a lithium carbonate project in Argentina operated by Toyota Tsusho and Australian lithium chemical producer Orocobre, Tokyo's the Nikkei reported. The move is to tap into the rising demand for electric vehicles.

* Nippon Life Insurance Co. and Sompo Holdings Inc. will each invest ¥300 million into a cancer screening venture company, SalivaTech, the Nikkei reported. Nippon Life has collaborated with the start-up since 2017 in screening and product development.

* A sovereign wealth fund in the Middle East is in talks to acquire an equity stake in Woori Financial Group Inc., the Maeil Business Newspaper reported, citing investment banking sources.

ASEAN

* Bank of Ayudhya PCL is issuing US$220 million of bonds to help boost women-led small- and medium-sized businesses' access to finance and capital in the country, according to a release. The gender bonds will be issued in October and subscribed by International Finance Corporation, a World Bank member, and Deutsche Investitions und Entwicklungsgesellschaft.

* Advanced Bank of Asia Ltd., a unit of National Bank of Canada, listed 84.82 billion riels of bonds on the Cambodia Securities Exchange, Xinhua News Agency reported.

* The Philippines' Department of Finance and the Bangsamoro Autonomous Region in Muslim Mindanao plans to establish an Islamic bank in the region, The Philippine Star reported. The move will require a bill signed by President Rodrigo Duterte.

* The Philippines' Supreme Court dismissed graft allegations against several ex-officials of Development Bank of the Philippines in connection with loans given to a textile company decades ago, Manila Bulletin reported.

SOUTH ASIA

* India Finance Minister Nirmala Sitharaman said the government will inject 700 billion rupees into state-owned banks in the current fiscal year, MoneyControl reported. The government will also provide 200 billion rupees to struggling housing finance companies to boost their lending capacity, Press Trust of India reported.

* India's anti-corruption watchdog has set up an advisory board to review bank frauds of more than 500 million rupees and recommend actions, Press Trust of India reported. Further, the advisory board will conduct fraud analysis and share results with the central bank.

* Bangladeshi banks' nonperforming loans continued to grow in the second quarter despite steps taken by the central bank to reduce NPLs in the banking system, Dhaka Tribune reported. The central bank's data show NPLs increased to 1.124 trillion taka as of end-June from 1.109 trillion taka as of end-March.

* Thirteen Bangladeshi banks faced a provisioning shortfall of 128.97 billion taka as of end-June, Dhaka Tribune reported, citing data from the central bank. Four of the banks are state-owned, while nine are private commercial banks.

AUSTRALIA AND NEW ZEALAND

* MyState Ltd. CEO Melos Sulicich said he expects further consolidation among smaller banks in Australia as lower interest rates hit banks' margins, The Australian reported. Sulicich also said mortgage growth would remain subdued in the current fiscal year.

* HSBC Holdings PLC eliminated about 10 jobs from M&A advisory teams in Australia and Japan, Bloomberg News reported, citing a person with knowledge of the matter.

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

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