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China bars 40 banks from interbank biz; India cuts policy rate

Banking Essentials Newsletter December Edition Part 2

Banking Essentials Newsletter - November Edition

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


China bars 40 banks from interbank biz; India cuts policy rate

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.

China bars 40 banks from interbank account biz, other regulatory actions

* China's central bank reportedly barred 40 banks, including China Construction Bank Corp., Bank of China Ltd. and Agricultural Bank of China Ltd., from performing interbank account businesses for three to six months after they were found to have breached regulations.

* Australia's anti money-laundering regulator filed a civil lawsuit against Commonwealth Bank of Australia for alleged violation of money-laundering and counterterrorism financing laws.

* Separately, Australia's markets regulator cleared CBA and seven other banks of any systemic misconduct after reviewing their sales practices. The other seven banks include Australia & New Zealand Banking Group Ltd., Westpac Banking Corp. and National Australia Bank Ltd.

* India's central bank imposed a 30 million-Indian-rupee fine on Union Bank of India due to noncompliance of know-your-customer norms, in two different cases.

* China's banking watchdog tightened rules restricting regulatory officials and their relatives from joining banks, as it bids to limit corruption risks.

* The Vietnamese government is said to have arrested two former executives of Saigon Thuong Tin Commercial Joint Stock Bank, or Sacombank, and issued arrest warrants for 14 bankers from various other banks for allegedly violating regulations.

Monetary policy decisions

* The Reserve Bank of India reduced its repo rate by 25 basis points to 6.0% with immediate effect, while maintaining its neutral policy stance.

* Meanwhile, the Reserve Bank of Australia and the Central Bank of Sri Lanka kept their respective interest rates unchanged.

Earnings corner

* Mitsubishi UFJ Financial Group Inc. and units Bank of Tokyo-Mitsubishi UFJ Ltd. and Mitsubishi UFJ Trust & Banking Corp. posted higher net profits for the fiscal first quarter ended June 30. Sumitomo Mitsui Financial Group Inc. and unit Sumitomo Mitsui Banking Corp. reported increased net profits for the period. Mizuho Financial Group Inc. reported a decline in profit, while its unit Mizuho Bank Ltd. saw an increase in net income.

* DBS Group Holdings Ltd.'s second-quarter net profit rose 8% year over year.

* United Bank Ltd. reported a 17.7% year-over-year decline in net profit for the second quarter.

* Punjab National Bank reported an increase in net profit for the fiscal first quarter ended June 30, while Central Bank of India posted a lower net loss for the period.

* Bank of the Philippine Islands reported a 7.7% year-over-year decline in first-half net income, while China Banking Corp.'s consolidated net income for the period climbed 10% year over year. Meanwhile, BDO Unibank Inc. reported net income of 13.3 billion pesos for the six months ended June 30.

M&A updates

* Mitsubishi UFJ Trust & Banking plans to ramp up overseas acquisitions as it aims to become one of the 15 biggest asset managers worldwide.

* Resona Bank Ltd. completed the acquisition of Singapore-based AFC Merchant Bank and changed the name of the latter to Resona Merchant Bank Asia Ltd.

* Bajaj Finance Ltd. agreed to acquire a 10.83% stake in Indian e-payment service provider One Mobikwik Systems Pvt. Ltd. for about 2.25 billion Indian rupees.

* My Credit Union Ltd. will merge with Beyond Bank Australia, subject to regulatory approval and the approval of My Credit Union's members.

In other news

* India's public sector banks need 1.9 trillion Indian rupees of capital over the next two years to write down nonperforming loans and meet requirements under Basel III, S&P Global Ratings said.

* Macquarie Group Ltd. Chairman Peter Warne voiced concerns about the Australian government's new bank levy, which has spurred the company to consider moving its headquarters offshore.

* China's largest peer-to-peer lending platform Hongling Capital plans to exit the struggling online lending business within three years, mainly because debtors have not paid back 800 million Chinese yuan in loans.

* Bank Islam Malaysia Bhd. has collaborated with U.S.-based consulting company Cognizant to develop a digital banking platform.

* S&P Global Ratings lowered its outlook on Japan-based 77 Bank Ltd. to negative from stable, as the bank's revenue base has weakened due to Japan's low interest-rate environment.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.