HDFC raises 250B rupees via debentures; UBS eyes mutual fund business in China

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.

Earnings corner

* Hang Seng Bank Ltd. reported a 27% decline in its 2022 net profit to HK$10.17 billion, which the lender attributed to an increase in expected credit losses to reflect the higher risk for borrowers of mainland China’s commercial real estate sector.

* United Overseas Bank Ltd.’s core net profit rose 18% year over year to S$4.80 billion in fiscal year 2022, led by robust net interest income and stable asset quality. The bank’s net profit including one-off expenses stood at S$4.60 billion.

* Metropolitan Bank & Trust Co. posted a 48% year-over-year increase in net profit in 2022 to 32.89 billion Philippine pesos on the back of better corporate and consumer lending businesses, healthy fee income and subdued operating expense growth.

* Hong Kong Exchanges and Clearing Ltd. reported an 11% year-over-year increase in its fourth-quarter net profit to HK$2.98 billion.

M&A and deals

* The consolidation of banks in India has, on average, benefited the sector due to improved financial performance and efficiency of the acquirer post-merger, according to a research paper conducted by the Reserve Bank of India.

* Jahangir Siddiqui & Co. Ltd. plans to sell its entire 21.26% stake in BankIslami Pakistan Ltd. to its JS Bank Ltd. subsidiary in exchange for 266,747,498 shares in the banking unit.

* Indian private lender HDFC Bank Ltd. and United Arab Emirates-based LuLu Exchange signed an agreement to strengthen cross-border payments between India and the Gulf Cooperation Council region, the Economic Times reported.

Regulatory activities

* China kept its loan prime rate unchanged for the sixth straight month. The People’s Bank of China set the one-year loan prime rate at 3.65% and the five-year LPR at 4.3%.

* The monetary policy board of the Bank of Korea kept the base rate unchanged at 3.50%, saying it would see whether the rate needs to rise further, as it continues to monitor the pace of inflation and other developments.

* The monetary policy committee of the Reserve Bank of New Zealand increased the official cash rate to 4.75% from 4.25%, citing high core inflation, a sustainable level of employment and elevated near-term inflation expectations.

* New Zealand’s Financial Markets Authority is seeking feedback on proposed rules that would let financial institutions offer products and services through intermediaries.

* The China Banking and Insurance Regulatory Commission is planning to roll out differentiated risk weightings to reflect more accurately the overall risk levels of banks and their capacity to continue sustainable operations, the South China Morning Post reported.

* The Reserve Bank of India issued draft guidelines for minimum capital requirements for market risks as part of an effort to align the central bank’s regulations for banks with Basel III standards.

* The Financial Services Commission said South Korea’s cabinet approved a proposal to amend the Asset-Backed Securitization Act of 1998.

* The CBIRC imposed an aggregate of 387.9 million yuan in fines on five banks for various violations.

In other news

* Indonesian President Joko Widodo called for controlling high margins made by the banks as banks in the nation are offering loan rates higher than the policy rates of 5.75%, Bloomberg News reported.

* The Bank of Japan will launch a pilot program to test its central bank digital currency in April 2023, more than two years after it began exploring the feasibility of digital currencies.

* Housing Development Finance Corp. Ltd. raised 250 billion rupees through the issue of 10-year secured, nonconvertible debentures with a coupon rate of 7.97%.

* Joint Stock Commercial Bank for Investment and Development of Vietnam released a sustainable loan framework in consultation with the Carbon Trust, making it the first commercial bank in Vietnam to do so, Việt Nam News reported, citing CEO Lê Ngọc Lâm.

* UBS AG is eyeing a license for mutual-fund business in China in a bid to cash in on Beijing’s relaxed rules on foreign financial institutions, The Wall Street Journal reported, citing people familiar with the matter.

* HDFC Bank Ltd. raised $750 million via an issuance of senior unsecured bonds. The three-year bonds were priced with a coupon of 5.686% and will mature March 2, 2026.

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