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 require a subscription.
21 applications submitted for 5 Singapore digital banking licenses; central banks review regulations
* The Monetary Authority of Singapore received 21 applications for digital bank licenses as of the close of application Dec. 31, 2019. The central bank will announce the successful applicants in June and they are expected to commence operations by mid-2021.
* The People's Bank of China agreed to pay a 0.35% annual interest on customer funds that third-party payment providers are required to deposit into accounts managed by the bank, Caixin reported. The move marks the regulator's reversal of a no-interest policy that it initially implemented in 2017.
* The Chinese central bank also said it would strengthen regulations for financial institutions and step up support for troubled banks and small businesses in 2020 in an effort to curb financial risks.
* Meanwhile, the Philippine central bank issued regulations for the country's Islamic banks and Islamic banking units. The Bangko Sentral ng Pilipinas said the approved rules cover the licensing framework on the establishment of Islamic lenders and the BSP's expectations on the Shariah governance framework concerning such banks.
* The Central Bank of Sri Lanka kicked-off 2020 with plans to implement a new banking law, encourage consolidation among licensed finance companies and prepare a comprehensive resolution framework for financial institutions. The proposals are part of the bank's roadmap for 2020.
M&A activity
* China's Huishang Bank Corp. Ltd. plans to acquire a 15% stake in Baoshang Bank Co. Ltd. by investing 3.6 billion yuan as part of a state-backed attempt to save the troubled bank from becoming insolvent, the South China Morning Post reported, citing banking sources.
* Japan's Aozora Bank Ltd. signed a deal to acquire a 15% stake in Vietnam's Orient Commercial Joint Stock Bank under a capital and business alliance between the two lenders. The deal is expected to be worth about ¥15 billion, according to a report from The Nikkei.
* Bank of East Asia Ltd. is selling its entire 21% stake in Cambodia's PRASAC Microfinance Institution Ltd. to KB Kookmin Bank for an undisclosed amount. The move comes after the South Korean lender agreed to acquire a 70% stake in the microfinance firm from Sri Lanka's LOLC Holdings Plc for US$603.4 million.
IPOs, Capital raises
* South Korean internet lender KakaoBank of Korea Corp. aims to launch an IPO by the end of 2020, Yonhap News Agency reported, citing Co-CEO Lee Yong-woo.
* Industrial & Commercial Bank of China Ltd. plans to issue up to 80 billion yuan worth of new capital instruments.
In other news
* Westpac Banking Corp. commenced an accountability review that will include reviewing staff emails for the past 10 years after the bank was accused of breaching financial crime laws, The Australian reported.
* KB Financial Group Inc. and Woori Financial Group Inc., among other companies, will submit a preliminary bid for Prudential Life Insurance Co. of Korea Ltd. on Jan. 20, Pulse reported.
* Moody's assigned Laos a first-time local- and foreign-currency long-term issuer rating of B3, with a positive outlook.
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