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Bank of China in HK$7.69B deal; 5 major banks fined in India

S&P Global Market Intelligence offers our top picks of banking news stories and more published throughout the week. Please note that some entries have links to third-party sources that may require a subscription.

M&A activity heats up in Asia-Pacific

* Bank of China Ltd. unit Bank of China (Hong Kong) Ltd. agreed to sell a 70.49% stake in Hong Kong-based Chiyu Banking Corp. Ltd. to Xiamen International Investment Ltd. and the Committee of Jimei Schools for HK$7.69 billion.

* TISCO Financial Group PCL is acquiring Standard Chartered Plc's retail banking business in Thailand. Under the proposed deal, Standard Chartered Bank (Thai) PCL will transfer the business to TISCO Financial subsidiaries TISCO Bank PCL and All-Ways Co. Ltd.

* Malaysia Building Society Bhd. is considering a merger with Asian Finance Bank Bhd., more than 10 months after its failure to merge with another Malaysian Islamic bank. The Malaysian central bank has required Malaysia Building Society to complete negations with Asian Finance Bank's shareholders for a merger within six months.

* Tokai Tokyo Financial Holdings Inc. will reportedly buy Eternal Co., an insurance agency with a countrywide sales network, as part of efforts to attract younger customers.

* Bank of Queensland Ltd. will acquire Centrepoint Alliance Ltd.'s premium funding business for A$20 million. Meanwhile, Bendigo & Adelaide Bank Ltd. agreed to sell its estates and trusts business in a A$5 million deal.

* Heritage Bank Ltd. decided to sell its financial planning business to Bridges Financial Services, effective December, as part of its plan to focus on core banking activities.

* Macquarie Group Ltd. will likely receive approval from the U.K. government to buy UK Green Investment Bank Plc in January 2017. The sale of the bank is expected to complete before the end of March 2017.

* Korea Development Bank reportedly received one final bid for its 85% stake in KDB Life Insurance Co. Ltd. The policy bank is seeking to raise 900 billion won from the sale.

* On the contrary, Sri Lankan Prime Minister Ranil Wickremesinghe ordered the cancellation of Bank of Ceylon's sale of a 7% stake in Seylan Bank Plc to a foreign fund due to the state-owned lender's failure to follow proper procedures.

Asia-Pacific central banks maintain policy rates

* Philippines' central bank decided to maintain the interest rate on the overnight reverse repurchase facility at 3%. Bangko Sentral ng Pilipinas also maintained interest rates on the overnight lending and deposit facilities. The reserve requirement ratios were also left unchanged.

* Taiwan's central bank decided to keep its benchmark rate unchanged on the back of improved economic indicators. The Central Bank of the Republic of China (Taiwan) kept the policy rate at 1.375%.

* The central bank of Thailand kept its policy rate unchanged at 1.50% as monetary conditions remained accommodative and conducive to the country's economic recovery.

* Meanwhile, the Bank of Japan decided to stick with its negative policy rate, as part of efforts to achieve a price stability target of 2%. The central bank maintained the minus 0.1% interest rate on policy rate balances in current accounts held by financial institutions at the central bank.

Regulatory, legal developments

* The Reserve Bank of India fined five foreign banks for violating its instructions for reporting requirements of the country's Foreign Exchange Management Act. The banks are Deutsche Bank AG, Standard Chartered Bank, Bank of America Corp., Bank of Tokyo-Mitsubishi UFJ Ltd. and Royal Bank of Scotland Group Plc.

* National Australia Bank Ltd. and Commonwealth Bank of Australia agreed to take steps to strengthen systems and controls in their wholesale spot foreign exchange businesses as part of their enforceable undertakings with the Australian Securities and Investments Commission. The regulator said the banks failed to ensure that their systems and controls were adequate to address risks relating to instances of inappropriate conduct identified by the commission between Jan. 1, 2008, and June 30, 2013.

* Former BSI SA banker Yeo Jiawei was sentenced to 30 months in jail on charges of witness tampering in connection with the 1Malaysia Development Bhd. scandal. The news came days after a Singapore court sentenced former BSI banker Yvonne Seah Yew Foong to two weeks in jail in connection with alleged money laundering linked to 1MDB.

* China's banking regulator banned banks from funding coal and steel firms that are violating capacity cuts, the latest government effort to reduce banks' loans to industries that are struggling with overcapacity.

* Taiwan's Financial Supervisory Commission is investigating SinoPac Financial Holdings Co. Ltd. in connection with a series of questionable loans. The company is reviewing its lending operations to ensure they all meet regulatory requirements.

In other news

* Commonwealth Bank of Australia sold its remaining stake in Visa Inc. for A$439 million and realized an after-tax profit on the sale of A$278 million.

* Bank of China and China Construction Bank Corp. announced plans to set up asset management units for conducting debt-to-equity swap business.

* Bank of Singapore Ltd. is considering establishing a private bank in the U.K. as costs have fallen there since Britain decided to leave the EU.

* The Philippine government is targeting a Sept. 1, 2017, operational start date for a new bank dedicated to the needs of overseas Filipino workers.

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