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Japanese lender seeks bank deals in US, Asia; South Africa probes Indian bank

Banking Essentials Newsletter December Edition Part 2

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Japanese lender seeks bank deals in US, Asia; South Africa probes Indian bank

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.

Bank of Tokyo-Mitsubishi seeks bank deals in US, Asia; other deal updates

* Japan's Bank of Tokyo-Mitsubishi UFJ Ltd. is looking to spend about ¥100 billion on acquisitions in the banking space in the U.S. and Asia in order to expand global operations amid declining profitability in its home market.

* Taiwan's First Financial Holding Co. Ltd. agreed to acquire Aviva International Holdings Ltd.'s entire 49% stake in joint venture First-Aviva Life Insurance Co. Ltd.

* India's National Bank for Agriculture & Rural Development, or NABARD, reportedly acquired an additional 7% stake in Small Industries Development Bank of India, or SIDBI, from IDBI Bank Ltd. for 9 billion Indian rupees.

* Axis Bank Ltd. acquired digital payments platform from Jasper Infotech Private Ltd for 3.73 billion rupees in cash.

* The state government of Kerala in India said it plans to complete "all formalities" regarding the establishment of the Kerala Co-Operative Bank by Aug. 16, 2018.

* Three sets of investors, one of which is local, have shown interest in acquiring a substantial stake in the state-run Islamic Bank of Thailand.

APRA hints at tougher oversight, CBA faces class-action suit

* The Australian Prudential Regulation Authority may implement tougher requirements regarding the bonuses of banking and financial services executives. The move comes after the government unveiled the draft Banking Executive Accountability Regime Bill, which is designed to strengthen the accountability and responsibility framework for the most senior and influential directors and executives in banks.

* Meanwhile, the Australian government is set to amend the draft legislation to allow bankers to challenge penalties imposed by the prudential regulator under its expanded powers.

* Commonwealth Bank of Australia shareholders filed a class-action lawsuit against the lender following a drop in the share price on allegations that it breached money laundering and terrorism financing rules.

* The Australian Securities & Investments Commission concluded the first stage of its targeted review on interest-only home loans, which looked into whether individuals are taking up more expensive interest-only loans at the urging of banks and mortgage brokers. ASIC has now moved into the second stage of the review, which will examine individual loan files from banks and mortgage brokers to look into whether lenders are providing interest-only home loans in appropriate circumstances.

* ASX Ltd. published the trade and trade reporting guidelines for the new method of calculation of the benchmark Bank Bill Swap Rate. The BBSW rates are now calculated based on trading of bank paper in the rate set window, with a volume weighted average price calculation methodology.

South Africa probes Bank of Baroda over funds mismanagement, other regulatory actions

* The South African Reserve Bank is reportedly investigating India-based Bank of Baroda for holding trust funds of companies controlled by the politically connected Gupta family. The central bank launched the latest probe after the Organisation Undoing Tax Abuse alleged that mine-rehabilitation funds held for two of the Gupta family's companies were mismanaged and used to repay loans.

* South Korea's first internet-only bank, K bank, could face problems with its license after an independent financial reform panel found potential irregularities in its licensing process. The panel believes there was a "problem in administrative procedure" in approving Woori Bank as a major K bank shareholder.

* The government of Indonesia is investigating whether citizens linked to the transfer of US$1.4 billion of assets by Standard Chartered Plc have complied with tax amnesty requirements. Indonesia's finance ministry received information that 81 private citizens were involved in the transfer, 62 of whom were tax amnesty participants.

* The Bangladesh central bank fined seven banks an aggregate of 1.5 million taka over alleged violation of stock market rules.

* India's central bank placed Oriental Bank of Commerce under prompt corrective action due to the lender's high net nonperforming assets.

* The Philippines' central bank approved amendments to regulations relating to the issuance of bonds and commercial paper by banks.

* The State Bank of Vietnam is looking to promote cashless payment by having card readers installed at points of sale and mobile points of sale from 2017 to 2020.

* Sri Lankan police arrested two people related to the hacking incident at Taiwan's Far Eastern International Bank Ltd. Earlier, the bank reported lost funds of less than US$500,000 after hackers infected the bank's computer systems with malware, and used it to transfer nearly US$60 million from customers' accounts to foreign destinations.

In other news

* China's shadow banking sector shrunk in response to a regulatory crackdown which began early in 2017, and is likely to face continued regulatory scrutiny so long as the authorities remain comfortable with economic growth, Fitch Ratings said.

* The Indian government increased its shareholding in IDBI Bank by acquiring an additional 3.81% stake in the bank through a preferential allotment.

* Further, the Indian government is planning to open nearly 650 branches of India Post Payments Bank as part of efforts to facilitate financial inclusion.

* Liaoning Zhenxing Bank Co. Ltd. obtained approval to operate as the first privately owned bank in China's northeastern Liaoning province.

* Moody's raised the outlook on Hong Kong-based China CITIC Bank International Ltd. to stable from negative.

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