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US bankruptcy court probes PNB's alleged fraud; Philippines lifts policy rate

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.

Frauds, probes and more

* A U.S. bankruptcy court started an investigation into the alleged fraud involving jeweler Nirav Modi and Punjab National Bank.

* The South Korean Supreme Court upheld a lower court ruling that Kang Man-soo, former finance minister and head of Korea Development Bank, will serve five years and two months in prison for abusing his power while in office.

* South Korea's Financial Supervisory Service sent 22 cases of alleged hiring irregularities at units of Shinhan Financial Group Co. Ltd. to prosecutors for further investigation.

* Australia's major banks offered differing responses to claims by the royal commission of misconduct at their financial planning arms, with Commonwealth Bank of Australia admitting to certain findings of misconduct, while other lenders, including Westpac Banking Corp. and Australia & New Zealand Banking Group Ltd., denied the commission's accusations.

* The Chinese banking and insurance regulator fined China Merchants Bank Co. Ltd., Shanghai Pudong Development Bank Co. Ltd. and Industrial Bank Co. Ltd. over irregularities related to their wealth management operations.

* The Monetary Authority of Singapore imposed a four-year ban on Lim Fang Wee, a former representative of Credit Suisse Group AG's Singapore branch, for dishonest conduct.

* Bangladesh is open to settling out of court its dispute with Philippines' Rizal Commercial Banking Corp. over the theft of US$81 million from the Bangladesh central bank's accounts in New York in 2016.

Regulatory developments

* The Australian government will start implementing an open banking regime in a phased manner from July 2019, which would give banking customers greater access to, and control over, the data their banks hold on them

* The China Banking and Insurance Regulatory Commission capped lenders' risk exposures to each interbank and nonbank client to 25% and 15% of net Tier 1 capital, respectively.

* Separately, the banking regulator announced a ban on interprovincial trading of paper-based bills of exchange among banks, effective Nov. 2.

* China issued detailed rules to curb lending by nonbanks, including requiring all nonbank and P2P lending platforms to obtain regulatory approvals before beginning operations.

* The Korea Federation of Banks will implement the code of ethics and business conduct across South Korean member banks in June.

* Japan's Financial Services Agency is considering allowing banks to close on weekdays as the number of people patronizing bank branches declines.

M&A updates

* Commonwealth Bank of Australia could reportedly divest all of its Colonial First State business after putting the asset management part of the operations up for sale.

* Japanese lenders Fukuoka Financial Group Inc. and Eighteenth Bank Ltd. appealed anew to local antitrust regulators to allow them to merge, pledging they would not breach antitrust laws.

* China CITIC Bank Corp. Ltd. is interested in buying a Belarusian bank.

Earnings corner

* Commonwealth Bank of Australia posted an unaudited cash profit of approximately A$2.35 billion for the quarter ended March 31, down 2% compared with the average of the first half of fiscal 2018.

* Sumitomo Mitsui Trust Holdings Inc., Resona Holdings Inc. and Chiba Bank Ltd. posted year-over-year increases in net income for the fiscal year ended March 31, while Concordia Financial Group Ltd.'s full-year profit plunged 47.5% year over year.

* Union Bank of India reported a net loss for the fiscal fourth quarter ended March 31, while ICICI Bank Ltd.'s net profit for the quarter fell year over year.

* Philippine National Bank's consolidated net profit for the first quarter increased 20% year over year.

* Taiwan's CTBC Financial Holding Co. Ltd. reported a year-over-year rise in net income for the first quarter.

In other news

* The Philippine central bank raised its interest rate for the first time since September 2014 in a bid to dampen inflationary pressures. Separately, the central banks of Sri Lanka, New Zealand and Malaysia in separate decisions kept their respective policy rates unchanged.

* Singapore's regulatory push to accelerate the adoption of artificial intelligence, or AI, in the financial sector will help banks in the city-state to achieve greater operational cost efficiencies and tap new revenue opportunities, Moody's said.

* Australia-based small business lender Prospa is seeking to raise up to A$160 million in its IPO.

* East West Banking Corp. is considering a stock rights offering in the second half in order to fund its growth plans.

* MUFG Bank Ltd. plans to combine certain functions from its Asian branches outside Japan into its newly opened Manila back-office center.

* Australia's prudential regulator granted the country's first banking license to a digital-only lender.

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