Today’s need-to-know storiesUS bank profits rise 12% in second quarter

US banks reported stronger profits and lending growth in the second quarter, although unrealised losses on securities edged higher, according to the Federal Deposit Insurance Corporation’s latest quarterly banking profile. 

Net income across the country’s 4,238 insured lenders rose 12 per cent from the previous quarter to $90.1bn, helped by a one basis point increase in net interest margins to 3.32 per cent.

Loan and lease balances climbed 1.8 per cent compared with the previous quarter and 6.8 per cent from a year earlier to $13.9tn, with lending to non-bank financial institutions rising by 3.4 per cent quarter on quarter.

Asset quality also improved, with the share of overdue or non-performing loans falling from 1.53 per cent to 1.44 per cent compared with the previous quarter, while the rate of loans written off as losses declined from 0.59 per cent to 0.57 per cent.

“The banking industry continued to have strong capital and liquidity levels, which support lending and protect against potential losses,” said FDIC chair Travis Hill.

However, unrealised securities losses increased 0.5 per cent during the quarter to $326.7bn, although they were 17.4 per cent lower than a year earlier. The number of banks on the FDIC’s “problem bank list” fell by seven to 47 during the quarter.

BNP Paribas eyes $2bn stake in Vietnam’s Techcombank

BNP Paribas is looking to acquire a stake of at least 15 per cent in Vietnam’s Techcombank, with South Korea’s Koominbank also looking to acquire the same-sized share.

The banks are looking to take a strategic share in a deal worth up to $2bn, with Techcombank seeking a valuation of about two times its book value, according to Reuters. 

Techcombank is the third-largest private bank in Vietnam, with more than 18mn clients and covering more than half of the country’s high-net-worth and affluent customers.

A deal is expected to be reached by the end of 2026 or the first half of 2027. 

Techcombank shares rose around 7 per cent in afternoon trading following reports of the deal. 

Both BNP and Kookminbank have operations in Vietnam, operating branches in Hanoi and Ho Chi Minh City. 

Banco BPM rejects Monte dei Paschi’s €25.3bn takeover approach

Banco BPM has pushed back against Monte dei Paschi di Siena’s €25.3bn takeover offer, saying the bid provides no premium to its shareholders.

In a statement on Tuesday, Banco BPM said MPS’s all-share offer had not been agreed with or solicited by the bank and “does not recognise a premium for Banco BPM shareholders”, based on share prices on August 19.

MPS has simultaneously launched an €8.7bn offer for wealth manager Banca Generali as it seeks to build a larger Italian banking group and fend off a takeover attempt by Intesa Sanpaolo.

Banco BPM said its board would formally assess the offer and publish its conclusions in accordance with Italian takeover rules.

BNP Paribas secures Saudi licence to establish regional headquarters

BNP Paribas has received a licence to establish a regional headquarters in Saudi Arabia as the French lender looks to expand its presence in the kingdom.

The licence was announced following a meeting in Paris between Saudi investment minister Fahd bin Abduljalil al Saif and BNP Paribas chair Jean Lemierre, according to the Saudi Press Agency.

Saudi Arabia has sought to attract the regional headquarters of multinational companies to Riyadh as part of efforts to develop the capital into a leading financial centre and compete with established Gulf hubs including Dubai and Abu Dhabi.

Under rules introduced by the Saudi government, international companies without a regional headquarters in the kingdom can be excluded from competing for some government contracts.

BNP Paribas already operates across the Middle East, with offices in Saudi Arabia, the UAE, Qatar, Kuwait and Bahrain. The French bank is the world’s largest lender by assets outside China and the US, according to The Banker Database.

HSBC Private Bank taps UBS and Bank of Singapore in Asia expansion drive

HSBC Private Bank has made four senior hires across the Middle East and Asia. 

The bank has announced Vivek Pandohi as the head of the global India franchise in the Middle East. He is tasked with expanding coverage across the Gulf Cooperation Council. He has previously held roles in the United Arab Emirates at HSBC. 

Pandohi will be joined by Harjeet Singh, who has joined from the Bank of Singapore as senior deal head for global India in Singapore. 

Lay Hong Tan joins the bank from UBS Singapore as the desk head of HSBC’s Singapore market. She will be focusing on Singapore’s ultra-high-net-worth and high-net-worth families, and Mandarin-speaking clients in the region.

Jay See joins from UBS as the team as desk head, offshore China market (Singapore). He is tasked with strengthening HSBC’s connectivity across Greater China and south-east Asia and further enhancing HSBC’s China franchise.