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Tokio Marine in South African deal; Chinese i-bank moves closer to Hong Kong IPO

Banking Essentials Newsletter - November Edition

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Tokio Marine in South African deal; Chinese i-bank moves closer to Hong Kong IPO

GREATER CHINA

* Beijing-based investment bank China Renaissance Group has completed preliminary steps towards an IPO in Hong Kong, from which it looks to raise between US$300 million and US$400 million, the South China Morning Post reported, citing several people familiar with the matter. The bank, which targets a valuation of between US$3 billion and US$4 billion, will commence pre-deal investor education in the week of Sept. 10 and international roadshows beginning mid-September.

* Moody's revised the outlook on China Huarong Asset Management Co. Ltd.'s long- and short-term issuer ratings of A3 and P-2, respectively, to negative from stable due to uncertainties regarding the asset manager's quality, capital and profitability in the wake of a probe into former Chairman Lai Xiaomin. The rating agency also affirmed the ratings and lowered the asset manager's baseline credit assessment to "b1" from "ba3."

* China Development Bank pledged a US$500 million loan to African Export-Import Bank, as the two banks aim to improve their ties in financing infrastructure and power, among other areas, Xinhua News Agency reported. The Chinese financial institution earlier signed a US$600 million loan agreement with National Bank of Egypt (SAE), the news outlet separately reported.

* China-based Bank of Guiyang Co. Ltd. intends to issue 50 million preferred shares and raise up to 5 billion yuan to replenish its Tier 1 capital and raise its capital adequacy ratio, the Securities Daily reported.

* China Merchants Bank Co. Ltd.'s private banking business managed 2.03 trillion yuan worth of assets in the first half, the highest among 19 banks with private banking businesses, the Securities Times reported. The growth of fortunes among Chinese rich people are attracting more local banks to engage in the private banking business.

JAPAN AND KOREA

* Tokio Marine Holdings Inc. is set to enter the African insurance market by purchasing 22.5% stakes in a pair of South Africa-based insurers, Hollard Holdings (Pty) Ltd. and Hollard International, The Nikkei reported. The Japanese insurer is in the final stage of talks to invest about US$359 million capital in the South African companies and plans to close the transactions by the end of 2018, making the acquisitions equity-method subsidiaries, the report said.

* South Korea-based Viva Republica Co. Ltd., which operates the popular Toss mobile peer-to-peer payment service, is considering applying for a securities company license, The Financial News reported.

* South Korean crowdfunding platform operator Wadiz Corp. signed a memorandum of understanding with Singapore-based FundedHere Pte. Ltd. to promote cross-border cooperation on crowdfunding, the country's inews24 reported.

ASEAN

* U.K.-based insurer Nexus Underwriting Mgmt. Ltd. has closed its acquisition of Malaysia-based underwriting manager Huntington Underwriting Ltd. Gerard Pennefather will serve as chairman and Anthony Egerton as managing director of the underwriting manager, which will be re-branded and traded as Nexus Structured Solutions.

* The Monetary Authority of Singapore proposed tighter rules for financial institutions to help them enhance their cyber resilience and guard against cyber attacks. Under the proposal, financial firms would be required to address system security flaws in a timely manner and implement robust security for their systems, among other rules.

* Indonesia Stock Exchange said it is working with the country's Financial Services Authority to amend listing rules, as it looks to establish a dedicated technology section in 2019 for IPOs by startups, Reuters reported. Current rules require companies to be profitable within two years of listing, the report said.

* The Indonesian Sharia Bank Association has picked PT Bank Syariah Mandiri President Director Toni EB Subari as general chairman for the 2018 to 2021 term, Bisnis Indonesia reported.

SOUTH ASIA

* Singapore state investment firm Temasek Holdings (Pte.) Ltd. agreed to invest up to US$400 million in India-based National Investment and Infrastructure Fund Ltd.'s Master Fund, Mint reported. The Indian government established NIIF in 2015 as an investment vehicle for funding commercially viable greenfield, brownfield and stalled infrastructure projects.

* About 23 Indian lenders, including Bank of Baroda, HDFC Bank Ltd. and ICICI Bank Ltd., could face penalties with retrospective effect if they miss the daily target of eight Aadhaar enrollments or updates per branch starting Nov. 1, The Economic Times reported, citing the Unique Identification Authority of India. Aadhaar is a 12-digit unique identity number that can be obtained by Indian residents.

* India-based IDFC Bank Ltd. divested 12 power sector loans worth 25 billion rupees to Edelweiss Asset Reconstruction Co. Ltd. at one-fourth the price in an all-cash deal, as it looks to clean its books before its proposed merger with Capital First Ltd. takes effect, The Economic Times reported, citing two unnamed senior officials. The assets sold include Monnet Power, Jaiprakash Power Ventures and GVK Industries (Goinwal Saheb).

* Bangladesh-based City Bank Ltd. plans to invest 1.30 billion taka in its unit, City Brokerage Ltd., to raise its capital and improve its business capacity, The Daily Star reported, citing a post on the Dhaka Stock Exchange website. City Bank CFO Mohammad Mahbubur Rahman said the lender will make the investment after receiving approval from the Bangladesh Bank and the Bangladesh Securities and Exchange Commission.

AUSTRALIA AND NEW ZEALAND

* Commonwealth Bank of Australia said it will raise its variable home loan rates by 15 basis points starting Oct. 4. Meanwhile, Australia & New Zealand Banking Group Ltd. will hike its variable mortgage rates by 16 basis points from Sept. 27, but said the increase would not apply to people in areas declared to be in drought. Both lenders cited higher funding costs as a reason for the rate hikes.

* Australian boutique investment manager Revolution Asset Management seeks to raise up to A$500 million for a fund investing partly in commercial property debt, as banks cut loans to property owners amid heightened regulatory pressure, Bloomberg News reported, citing co-founder Bob Sahota. Meanwhile, Canada Pension Plan Investment Board's CPPIB Credit Investments Inc. and Challenger Investment Partners have also created a fund to provide alternative financing to property owners in Australia and New Zealand.

* Australian banks said all lenders, including credit unions, building societies and payday lenders, must be required to meet new minimum behavior standards under the industry's revised code of conduct when dealing with customers, The Sydney Morning Herald reported, citing the Australian Banking Association's submission to the royal commission. The undisclosed submission claimed there was a gap in the current arrangements, creating uncertainty for consumers about the available protections.

IN OTHER PARTS OF THE WORLD

Middle East & Africa: Saudi insurers end merger talks; Bahrain's Investcorp invests in Swiss lender

Europe: Deutsche may have stalled illicit Danske money; Commerzbank falls out of DAX

Latin America: Akaan Lombard to buy Principal Mexico's life business

North America: AmEx's forex payments unit under FBI, OCC probe; Citi overhauls investment bank

Global Insurance: 'Huge potential' for ILS at AIG; quake hits Japan; DoJ to OK healthcare deals

Janna Estares, Sally Wang, Jonathan Cheah, Jaekwon Lim and Santibhap Ussavasodhi contributed to this report.

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