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India OKs 3-way bank merger; China seeks to spur small business lending

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India OKs 3-way bank merger; China seeks to spur small business 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.

M&A corner

* The Indian government approved the three-way merger of state-run lenders Bank of Baroda, Vijaya Bank and Dena Bank, with Bank of Baroda as the surviving entity. The boards of directors of the three banks also approved the merger and the swap ratio for the scheme.

* Industrial Bank of Korea obtained approval from Indonesia's Financial Services Authority for its proposed acquisition of two banks, PT Bank Mitraniaga Tbk and PT Bank Agris Tbk. The South Korean lender will merge the banks to create a combined bank in the first half of 2019.

* Woori Bank CEO Sohn Tae-seung said he would seek to grow the group's business through mergers and acquisitions. The CEO added that the group plans to diversify its business portfolio after Woori Financial Group Inc., the bank's new holding company, is set up.

* Land Bank of the Philippines extended the offer period for its proposed acquisition of Philippine Dealing System Holdings Corp. to Jan. 31 from Dec. 31, 2018, as there was "no response so far" from the latter's shareholders.

Regulatory updates

* The China Banking and Insurance Regulatory Commission issued new guidelines to rein in unlicensed operations of domestic lenders outside their home base, as part of a move to crack down on financial risk. Under the new rule, Chinese commercial banks, regional cooperatives and policy banks must apply for licenses to operate outside their home base.

* China's central bank widened its definition of small- and micro-sized enterprises to companies with bank credit lines of less than 10 million yuan, in another move to encourage lending to small businesses in the country.

* The Reserve Bank of India allowed banks to restructure stressed loans to micro, small and medium enterprises. The central bank said it will allow a one-time restructuring of existing stressed loans to MSMEs that are classified as standard as of Jan. 1, provided that lenders' aggregate exposure to a borrower does not exceed 250 million rupees.

* India's central bank also plans to revise prudential regulations, including elements of the Basel III capital framework following calls by the government to align its bank capital adequacy norms with those of Basel III.

In other news

* Woori Bank's shareholders approved a plan to set up Woori Financial Group Inc. The new holding company will start operations Jan. 11, and trading in its shares will begin Feb. 13.

* Huishang Bank Corp. Ltd. revived its plan to seek a secondary listing on the Shanghai stock exchange in its latest attempt to restore its public float to the minimum threshold of 25%. The bank plans to apply for an IPO and listing of up to 1.5 billion A shares.

* The Indian government injected 286.29 billion rupees into seven state-run banks, including Bank of India and United Bank of India.

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