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RCBC head resigns amid money laundering scandal; BNP Paribas trimming Asia equities biz

Banking Essentials Newsletter - November Edition

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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


RCBC head resigns amid money laundering scandal; BNP Paribas trimming Asia equities biz

*Rizal Commercial Banking Corp.President Lorenzo Tan has resignedfrom his position, Reuters reported. The move comes even after the companydetermined he is not liable for a money laundering scandal stemming from thecyber theft of US$81 million from Bangladesh Bank's account at the U.S. FederalReserve Bank of New York.

*BNP Paribas SA plansto trim its cash-equities operations in Asia and shut the business inIndonesia, Bloomberg News reported,citing people with knowledge of the matter. The company may cut about 40 jobsin the process.

*Kanbawza Bank Ltd.said it has received approvalfrom the Thai central bank to open a representative office in the country. Thelender is now seeking a permit to provide of a wide range of financial servicesin Thailand. The bank also has applied for approval to set up an office inSingapore.

*South Indian Bank Ltd.said it is teaming up with National Australia Bank to offer online remittancesfrom Australia at competitive rates, BusinessStandard reported.

*Shinhan Bank hasreceived approval to set up two new branches in India, Edaily reported.The bank currently has four branches.

GREATER CHINA

*China's State-owned Assets Supervision and Administration Commission saidoutstanding bonds issued by 82 central state-owned enterprises amounted to 4.05trillion yuan as of the end of March, with midterm notes accounting for 37.4%of the total, Caixin reported. Amongthe total, 8.4 billion yuan were in default.

*Hong Kong's Financial Services Developmental Council proposed the establishmentof a system connecting the bond markets of China and Hong Kong, similar to theprogram linking the stock markets of Shanghai and Hong Kong, Caixin reported. Thesize of China's bond market was estimated at 50 trillion yuan at the end ofMarch, with 320 overseas financial institutions approved to take part in theinterbank bond market.

*Wang Lihua, vice president of China Huarong Asset Management Co Ltd., said thesecuritization of nonperforming bank assets does not affect asset managementcompanies purchasing bad debt, Caixinreported.Wang said bad debt sales are still a key way to reduce nonperforming assets forbanks, and that asset management companies can also get involved innonperforming asset securitization.

*China's central bank said the country's foreign exchange reserve balanceincreased US$7.09 billion to US$3.220 trillion at the end of April, Shanghai Securities News reported.

*Foreign life insurers' market share in China increased 0.2 percentage point to5.8% in 2015, while foreign property and casualty insurers' share rose 0.9percentage point to 2.2%, Caixin reported.

*Fitch Ratings said Taiwanese banks are on track to meet Basel III capital requirementsand have a sufficient buffer against economic challenges, the Taipei Times reported.The Taiwanese banking sector is better capitalized than it appears and is nothighly leveraged, thanks to tougher rules for core capital eligibility andconservative risk weighting. Still a few banks, mostly state-run banks, willneed additional capital to meet Basel III requirements.

JAPAN AND KOREA

*The Bank of Japan said three exchange-traded funds focusing on shares ofcompanies that proactively invest in physical and human capital meet thecentral bank's investment criteria, MarketWatch reported.The three are the MSCI Japan Human and Physical Investment Index, theJPX/S&P Capex & Human Capital Index, and the Nomura Enterprise ValueAllocation Index.

*Tokai Tokyo Financial HoldingsInc. will partner with fintech company Money Forward, The Nikkei reported.The company will offer automated bookkeeping services for Tokai Tokyo Securitiescustomers from May 9.

*Bank of Tokyo-Mitsubishi UFJ Ltd.has lowered its long-term home loan rate to the lowest level in May, The Asahi Shimbun reported. Thecompany's rate for mortgages with terms of 21 to 30 years is 1.09%.

*Sumitomo Life Insurance Co.will increase payouts for private policyholders for a third straight year, The Nikkei reported.Other large life insurance companies, such as andDai-ichi Life Insurance Co. Ltd.,are making similar moves, while MeijiYasuda Life Insurance Co. will not follow suit.

*From the second half, accounting and disclosure rules for South Koreancompanies will be eased, the Korea EconomicDaily reported.

*KEB Hana Bank saidthe bank's head, Ham Young-joo, met with Iran's central bank on May 1 todiscuss possible cooperation initiatives, the Korea Economic Daily reported.The bank is looking to re-enter Iran after closing an office in the early 1990s.

ASEAN

* Post Today reported that theBank of Thailand is concerned about a prolonged drought in the country and afragile global economy, seeing them as threats to Thailand's economic recovery.

*Bank for Agriculture &Agricultural Co-operatives's board approved 16 billion Thai bahtworth of projects to help local farmers and stabilize domestic rice prices, Post Today reported. Theprojects include a loan program and a lending rate cut.

*Benjarong Suwankiri, head of TMB Analytics, said Thailand must have clearminimum wage guidelines for each region to build confidence among Thai andforeign investors in the long term, KrungthepTurakij reported.

* Bisnis Indonesia reportedthat several Indonesian banks, including PT Bank Permata Tbk and , plan to boostcapital to meet Financial Services Authority and Basel III rules.

*Bank Negara Malaysia had 381.4 billion Malaysian ringgit of forex reserves asof April 29, enough to cover 7.9 months of retained imports and 1.1x short-termexternal debt, The Star reported.

*HSBC Bank Malaysia Bhd.CEO Mukhtar Hussain said the country is well-positioned to benefit fromfinancial reform in China as it will allow more foreign and retail investors totake part in the bond market, The Starreported.

*Bangko Sentral ng Pilipinas data shows universal and commercial banks had acapital adequacy ratio of 14.9% at the end of 2015, well above the 10%requirement, BusinessWorld reported.

*The State Bank of Vietnam will act sternly against violators of interest rateregulations after reports said some commercial lenders are not following azero-percent requirement for rates on U.S. dollar deposits, Viet Nam News reported,citing a bank official.

SOUTH ASIA

*The Indian central bank is designing systems to publicize a list of willfuldefaulters and settle disputes related to bad loans outside court, the PressTrust of India reported,citing the central bank's governor.

*Max Bupa and Bank of Barodainked a bancassurance deal, the Press Trust of India reported.

*Speaking at an event, State Bank of Pakistan officials emphasized theimportance of loans in boosting economic growth and the need to provide softloans to small and medium-sized enterprises, The Nation reported.

AUSTRALIA AND NEW ZEALAND

*National Australia Bank Ltd.CEO Andrew Thorburn is upbeat about the A$6 trillion housing market, despite arecent rise in the number of troubled mortgages, as the sector has soundfundamentals, The Australian reported.

*The Australian Securities and Investments Commission will carry out a detailedinvestigation of mortgage brokers after consumer groups raised concerns that anearlier inquiry was too narrow in scope, TheSydney Morning Herald reported.

IN OTHER PARTS OF THE WORLD

*Hamilton, Bermuda-based Bank ofN.T. Butterfield & Son Ltd. has completed its of Bermuda Trust Co.Ltd. and HSBC Bank Bermuda Ltd.'sprivate banking investment management operations.

*Inversiones La Construcción SA,or ILC, signed a dealwith Corp Group Banking SA,Fondo de Inversión Privado Corp Life and Corp Group Interhold SpA, to acquirethe group's remaining shares in holding company Inversiones Confuturo, formerlyknown as Inversiones Confuturo SA,for 49.27 billion Chilean pesos, ILC said in a securities filing.

*Three Banco Santander Chileexecutives resignedfrom their posts after admitting to having purchased investment instrumentsoffered by Grupo Arcano, the Chilean private equity firm embroiled in a fraudinvestigation tied to its founder, Alberto Chang-Rajii.

* Aputative class-action complaint was filedApril 27 against Talmer BancorpInc., Chemical FinancialCorp. and several individuals in connection with the proposedmerger of the two Michigan-based banks, according to a Form 10-Q filed May 6 byTalmer.

Sally Wang, Sarun Saelee,Cathy Hwang, Emi White and Aditya Suharmoko contributed to this report.

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