China’s largest banks posted a decline in bad-loan ratios for 2012 amid the slowest economic expansion in 13 years, signaling policy makers may have averted a surge in defaults. The gauge shrank to 1.33 percent at Agricultural Bank of China Ltd., the nation’s third-largest by market value, from 1.55 percent in 2011, while net income increased by 19 percent, the Beijing-based lender said yesterday. At Bank of China Ltd., the fourth-largest, non-performing loans dropped to 0.95 percent of the total from 1 percent, while profit climbed 12 percent.

Big depositors in Cyprus's two main banks could be separated from their money for a long time, The Wall Street Journal reported. After rejecting a proposal to tax bank depositors to pay for a bailout, Cyprus—with a sharp push from its euro-zone peers and the International Monetary Fund—will instead put one bank through a kind of liquidation and radically restructure the other. As a consequence, even if Cypriot banks reopen from an extended holiday this week, big depositors will likely find they are still stuck.

Reason prevails but the damage is done. With their 11th-hour agreement with Cyprus for a €10bn bailout, eurozone policy makers avoided the worst: a catastrophic implosion of the island’s banking system and a hasty exit from the eurozone, the Financial Times reported. The deal reverses some initial errors. It targets depositors in troubled banks rather than indiscriminately across the sector. Insured deposits under €100,000 are safe. There will be restrictions on deposit withdrawals and transfers tailored to each bank rather than across-the-board capital controls.

The receivers for South Canterbury Finance have nearly finished their work and say they have recovered more than $770 million of the $1.58 billion the company owed, Radio New Zealand reported. South Canterbury Finance was placed in receivership in August 2010. The latest report from receivers Kerry Downey and William Black states all assets from the company have been realised. The receivers' report says all preferential creditors have been paid out in full, but unsecured creditors and shareholders probably won't get anything.

Cypriots braced on Sunday for the introduction of strict controls on withdrawing and transferring money from their bank accounts as their president made a last-ditch attempt in Brussels to secure an international bailout to spare the country from a chaotic bankruptcy, the Financial Times reported. The capital controls are expected to be in place on Tuesday morning to prevent a run on the island’s banks if and when they reopen after a 10-day closure that has brought the Cypriot economy to a standstill.

A US bankruptcy judge has approved a $US45 million ($43.3m) settlement between Lehman Brothers Holdings' Australian unit and a group of insurers over claims the bank misled a group of councils, charities and churches into buying risky securities backed by US mortgages, The Australian reported. Judge James Peck, of the US Bankruptcy Court in New York, yesterday signed off the settlement between 10 US insurance companies and the liquidators of Lehman Brothers Australia to settle the matter over collateralised debt obligations, or CDOs.

Cyprus, in an 11th-hour bid to unlock international aid, reopen the nation's banking system and preserve membership in the euro, readied a plan that would restructure its second-largest lender and enforce unprecedented restrictions on financial transactions, The Wall Street Journal reported. The proposals, if they take effect, would allow authorities to restrict noncash transactions, curtail check cashing, limit withdrawals and even convert checking accounts into fixed-term deposits when banks reopen. They have been closed since March 16.

The local government in Suntech Power Holdings Co Ltd's home town is seeking to bail out China's biggest solar panel maker to stave off its collapse, a person with knowledge of the matter told Reuters on Thursday. One proposal under consideration is allowing Wuxi Guolian, the local government's investment arm, to take over Suntech's Wuxi business through a restructuring, and test a bankruptcy law introduced in 2007. "Production has to continue," said the source in the city of Wuxi, where Suntech's headquarters are located.

Cyprus has thrown its international reputation as an offshore banking hub into peril after considering a bold plan to levy a one-time tax on deposits, The Wall Street Journal reported. The proposed tax—which would have helped Cyprus raise funds as part of a €10 billion ($13 billion) bailout deal from the European Union and International Monetary Fund—was rejected by Cyprus's Parliament on Tuesday. Cyprus is now scrambling to find other ways to raise the funds. Still, much of the damage appears to have been done. The tax proposal provoked outrage in Moscow.

Suntech Power, a Chinese manufacturer that became the world’s largest producer of solar panels by 2011 only to be battered by plummeting prices, announced on Wednesday evening that its main operating subsidiary had been pushed into bankruptcy by eight Chinese banks, the International Herald Tribune reported. Suntech was the Icarus of the solar panel industry, with production that soared year after year on heavy investment, as Western investors bought up its New York-traded shares and its international debt issues.