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Bandhan Bank to buy Gruh Finance; China moves to support bank lending


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Bandhan Bank to buy Gruh Finance; China moves to support bank lending

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.

Rural bank mergers in India, more M&A news

* India's government merged three regional rural banks — Punjab Gramin Bank, Malwa Gramin Bank and Sutlej Gramin Bank — into a single regional rural bank, effective Jan. 1. Separately, the government merged Madhya Bihar Gramin Bank and Bihar Gramin Bank to form Dakshin Bihar Gramin Bank.

* Philippine Business Bank Inc. received approval from the Philippines' central bank to acquire Insular Savers Bank Inc. for 575 million pesos.

* Joint Stock Commercial Bank for Foreign Trade of Vietnam obtained approval from Vietnam's State Securities Commission to sell a 3% stake to Singapore's GIC Pte. Ltd. and Mizuho Bank Ltd., in a deal that could fetch around US$270 million for the Vietnamese lender.

* Bandhan Bank Ltd. agreed to acquire and merge with Gruh Finance Ltd. The share exchange ratio for the merger will be 568 fully paid up shares of Bandhan Bank for every 1,000 shares of Gruh Finance.

* Faysal Bank Ltd. raised its stake in unit Faysal Asset Management Ltd. to 99.9%.

China moves to spur bank lending

* The People's Bank of China will cut banks' reserve requirement ratios by 0.5 percentage point Jan. 15 and by another half-percentage point Jan. 25. The central bank said the medium-term lending facility that will expire in the first quarter will not be renewed.

* China's latest move to classify more borrowers as small and micro-sized enterprises will free up as much as 800 billion yuan of additional cash for lending, analysts said.

* Moody's said the government's call for more bank lending to privately owned enterprises is credit negative for banks' asset quality given higher loan delinquencies among such companies focused on cyclical sectors.

Restructuring, expansions and joint ventures

* Sumitomo Mitsui Financial Group Inc. and Sumitomo Corp. completed the restructuring of their joint venture, Sumitomo Mitsui Finance & Leasing Co. Ltd. SMFL Capital Co. Ltd. merged into Sumitomo Mitsui Finance & Leasing, and its auto leasing business was spun off and integrated into SMAS Fleet Co. Ltd.

* Citigroup Inc. reportedly plans to set up a majority-owned securities joint venture in China after exiting its joint venture with Orient Securities Co. Ltd.

* Bank of Communications Co. Ltd. received regulatory approval to set up an asset management subsidiary, Bank of Communications Asset Management Co. Ltd.

* Rakuten Bank Ltd. and Rakuten Card Co. Ltd. agreed to form a joint venture with Waterland Financial Holding Co. Ltd. to establish an online banking service in Taiwan.

In other news

* ESAF Small Finance Bank Ltd. is considering an IPO in 2021 and is planning to open another 165 branches in the current fiscal year.

* Iran's Bank Pasargad PLC has received approval from the Indian government to open a branch in Mumbai.

* Former Woori Bank CEO Lee Kwang-goo was sentenced to 1.5 years in prison for favoring job candidates with links to the bank's important clients or high-ranking government officials.

* Singapore's United Overseas Bank Ltd. agreed to renew its bancassurance agreement with Prudential PLC in Asia-Pacific for 15 years. The new agreement expands the geographical scope to include a fifth market, Vietnam, alongside Singapore, Malaysia, Thailand and Indonesia.

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