When Baoshang Bank published its most recent annual financial statement in mid-2017, it claimed to have a non-performing loan ratio of just 1.68 per cent. Two years later, Baoshang, which has Rmb576bn ($83bn) in assets, has been taken over by the government because of its “serious credit risk”, the first such move in 18 years and a reminder of the hidden perils lurking within China’s financial system, the Financial Times reported. The need for a state rescue has raised questions about financial contagion.

India’s largest lender is hoping to capitalize on the country’s shadow banking crisis by building its mortgage and small business loan book as the non-banks are forced to pull back, Bloomberg News reported. State Bank of India, which is slowly emerging from a period of massive provisioning on loans to large corporates like Essar Steel India Ltd., sees opportunities in taking business from the shadow banks without creating new asset quality problems, according to Chairman Rajnish Kumar.

Aiful Corp., the consumer lender brought to the edge of bankruptcy a decade ago, is on the verge of selling Japan’s first yen-denominated junk bond in the public markets, showing how local investors are willing to take on more risks as negative interest rates linger, Bloomberg News reported. The issuance would be a milestone in Japan’s bond market, where companies haven’t felt compelled to sell speculative-grade notes as they’ve traditionally had close ties with banks, who can be more forgiving than bondholders in tough times.

Turkey’s industrial giants are struggling to keep a lid on soaring finance expenses that are threatening to engulf operating income as the lira’s depreciation pushes up foreign-borrowing costs, Bloomberg News reported. Istanbul’s top 500 industrial firms, which together account for almost half of the nation’s exports, reported finance expenses of 95.8 billion lira ($16 billion) last year, compared with 35.2 billion liras in 2017, according to Istanbul Chamber of Industry Chairman Erdal Bahcivan. The ratio of financial costs to operating profits almost doubled to 88.9%, he said.

Is it the start of a new era for China’s $42 trillion financial industry, or a one-time shock that will be quickly forgotten? Five days after the first government seizure of a Chinese bank in 20 years, investors are still grasping for answers, Bloomberg News reported. The takeover of Baoshang Bank Co. -- announced with scant explanation on Friday night -- left China watchers guessing at whether it marks an end to the implicit backstop for banks that has served as a linchpin of the country’s financial stability for decades.

India’s shadow banks are likely to see a further squeeze on their profit margins after the Reserve Bank of India signaled it will tighten liquidity requirements to bring them in line with the country’s more closely regulated commercial banks, Bloomberg News reported. Instead of providing a much-expected liquidity window to non-bank finance companies via the regular lenders, the central bank took a tougher stance on Friday by issuing draft guidelines requiring most NBFCs to set aside a liquidity buffer by investing in high-quality liquid assets, primarily sovereign bonds.

The Federal Government has agreed to write off the loan given to the state government for the rural water supply project on 2001 onward, said Prime Minister Tun Dr Mahathir Mohamad today. He said the loan was based on the balance that had not been settled on December 31, 2018 with the total amount of RM3.8 billion, which was subject to the state government to finalise the restructuring of water supply by December 31, 2019 at the latest, Malay Mail reported.

China is ducking a bankruptcy test. Baoshang Bank, linked to missing billionaire Xiao Jianhua, has been brought under state control, Reuters reported. Despite threats, Beijing remains wary of allowing even disgraced local lenders to fail. Interest in Baoshang, based in Inner Mongolia, comes thanks to its colourful history. Its biggest stakeholder - and a major borrower - was Tomorrow Holdings, run by Xiao until he vanished in 2017 from a Hong Kong hotel. The insurance conglomerate’s assets are now being sold off piecemeal.

The Delhi bench of the National Company Law Tribunal (NCLT) has dismissed ICICI Bank's application seeking insolvency proceedings against Hyderabad Ring Road Projects Pvt Ltd on the ground of duplicacy as proceedings are already underway against Era Infra Engineering, of which the former firm is a special purpose vehicle (SPV), Business Standard reported. The two-judge bench headed by NCLT President M.M. Kumar dismissed the petition, saying "on account of duplicacy of the claims the petition cannot be entertained".

ndia’s debt-ridden Anil Ambani group will exit the asset management business by selling shares in its joint venture to Japanese partner Nippon Life Insurance Co., which will take a controlling stake in India’s fifth-biggest mutual fund, Bloomberg News reported. Ambani’s Reliance Capital Ltd. signed a binding definitive agreement to sell 32.12% of Reliance Nippon Life Asset Management Ltd. for 45.2 billion rupees ($649 million) to the Japanese insurer, taking the latter’s shareholding to 75%, the companies said in statements on Thursday.