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State Bank of India posts Q1 loss; CIMB gets M&A nod; S&P changes ORIX outlook

GREATER CHINA

* The Chinese government proposed 10 new measures to combat risks caused by the peer-to-peer lending sector, including banning local authorities from allowing the establishment of new P2P firms or online finance platforms, Reuters reported, citing Xinhua News Agency. The proposal also includes requesting local governments to create "communications windows" to respond to P2P investors' requests, among other measures.

* China Huarong Asset Management Co. Ltd. expects to report "a prominent decrease" in net profit attributable to shareholders for the six months ended June from its profit in the year-ago period. The company attributed the expected drop to a substantial increase in provisions, a significant rise in interest expenses and a decline in valuations of part of financial assets the group holds.

* China Property and Casualty Reinsurance Co. Ltd. has completed setting up its noninsurance unit, China Re Catastrophe Risk Management Co. Ltd., with a registered capital of 100 million yuan. China Re P&C, a unit of China Reinsurance (Group) Corp., holds about 70% in the new entity.

* Fubon Financial Holding Co. Ltd. was given two months to draw clearer boundaries between the company and its affiliated industrial enterprises, including Taiwan Mobile Co. Ltd., the Taipei Times reported, citing Financial Supervisory Commission Chairman Wellington Koo. This comes after a probe found that brothers Fubon Financial Chairman Richard Tsai and Vice Chairman Daniel Tsai, who also hold vice chairman and chairman posts, respectively, at Taiwan Mobile, could hold undue influence at both firms.

JAPAN AND KOREA

* S&P Global Ratings changed its outlook on Japan-based ORIX Corp. to negative from stable, reflecting the rating agency's view that the company's overall business risk would rise after completing its acquisitions of a 100% stake in U.S.-based structured financing firm NXT Capital LLC and 30% of Ireland-based aircraft leasing company Avolon Holdings Ltd. ORIX's issuer credit rating was affirmed at A-.

* Higashi-Nippon Bank Ltd. said Chairman Michito Ishii will step down at the end of August to take responsibility for the company's lending misconduct, Jiji Press reported. The resignation is part of a business improvement plan submitted to the Financial Services Agency, under which Bank of Yokohama Ltd. belonging to the same Concordia Financial Group Ltd. will spearhead reform at Higashi-Nippon Bank, The Mainichi Shimbun reported.

* MUFG Bank Ltd.'s branch in Tianjin, China received sanctions from the China Banking and Insurance Regulatory Commission over undisclosed problems, Tokyo's The Nikkei reported. The sanctions include a fine of 2.7 million yuan and a one-year suspension of the branch manager from duty.

* The boards of Japan-headquartered TOMONY Holdings Inc. units Tokushima Bank Ltd. and Taisho Bank Ltd. approved a proposed merger between the two lenders, effective Jan. 1, 2020, The Nikkei reported.

* South Korea's TONGYANG Life Insurance Co. Ltd. said it will issue up to 200 billion won of subordinated bonds, Yonhap News Agency reported.

ASEAN

* Malaysia-based CIMB Group Holdings Bhd. received approval from Bank Negara Malaysia for its acquisition of Jupiter Securities Sdn. Bhd. and its sale of the cash equities business and CIMB Futures Sdn. Bhd. to the securities firm. The company will now enter into relevant agreements with China Galaxy Securities Co. Ltd. to formalize the proposed partnership.

* Moody's upgraded Vietnam's long-term issuer and senior unsecured ratings to Ba3 from B1 and changed its outlook to stable from positive, citing the country's strong growth potential and moderating government debt burden. The rating agency said the upgrade is also based on lower risks to the creditworthiness in the country's banking sector.

* Manila-headquartered Rizal Commercial Banking Corp. posted a consolidated net income of 2.2 billion Philippine pesos for the six-month period ended June. The lender's core income excluding nonrecurring income rose 47% year over year, while net interest income grew 12% to 9.7 billion pesos.

* The Bangko Sentral ng Pilipinas has eased rules on bank fundraising through bonds, as universal or commercial lenders and quasi-banks can now issue bonds or commercial papers without needing prior approval from the Philippine central bank. The authority said affected companies only need to submit a certification of compliance with the prudential criteria and supporting documents after their boards approve the bond issue.

SOUTH ASIA

* State Bank of India posted a consolidated net loss after minority interest for the first quarter ended June 30 of 42.30 billion rupees, or a loss of 4.74 rupees per share, against a net profit in the prior-year quarter of 30.32 billion rupees, or a profit of 3.70 rupees per share. The lender's provisions and contingencies more than doubled to 194.99 billion rupees from 90.51 billion rupees.

* Indian Finance Minister Piyush Goyal said the consolidation of State Bank of India with five subsidiaries and Bharatiya Mahila Bank has not led to job cuts, Press Trust of India reported. As of March 31, State Bank of India had a total of 156,964 employees, according to the report.

* Union Bank of India said its net profit for the fiscal first quarter increased year over year to 1.30 billion rupees from 1.17 billion rupees. EPS dropped to 1.11 rupees from 1.70 rupees.

* India-based HDFC Bank Ltd. said Paresh Sukthankar stepped down as deputy managing director. The resignation will take effect after three months.

AUSTRALIA AND NEW ZEALAND

* Andrew Hagger, chief customer officer heading consumer and wealth at National Australia Bank Ltd., was summoned to appear at the banking royal commission, making him the first bank executive to receive a summons at short notice without the chance to come up with a statement, The Australian reported. In a separate report from the publication, the Finance Sector Union called for an independent review of the culture within NAB, citing a "fundamental and ongoing crisis" in the company's management practice.

* Commonwealth Bank of Australia's results for the full year ended June emphasized strong margins and asset quality, but earnings challenges are increasing amid slower credit growth and rising wholesale funding costs, Moody's said. CBA said Aug. 8 that its full-year cash net profit after tax dropped 5% year over year on regulatory costs, including a A$700 million civil penalty.

R Sio, Sally Wang, Jonathan Cheah, Jaekwon Lim and Santibhap Ussavasodhi contributed to this report.

The Daily Dose has an editorial deadline of 6:30 a.m. Hong Kong time. Some external links may require a subscription. Links are current as of publication time, and we are not responsible if those links are unavailable later.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.