China’s policy banks recently embarked on a bond-issuance spree as they sought to lock in lower yields prior to the reinstatement of a value-added tax (VAT) on interest income. The Ministry of Finance announced in late July that it would reinstate a VAT on interest income from new debt issued by the government and financial firms from August 8, which would thus end an exemption that had been in place since the 1990s. Bonds sold before that deadline would be exempt from the tax, as would later reopenings of those notes.
Other than the Ministry of Finance, China’s three policy banks—Agricultural Development Bank of China (ADBC), China Development Bank (CDB) and Export-Import Bank of China (China Eximbank)—are the largest issuers in China’s domestic bond market. As such, the unexpected move to levy VAT once more raised alarm amongst bond issuers, who suggested that the tax could prompt investors to demand higher yields to cover their additional costs.
As reported by Bloomberg, the Agricultural Development Bank of China offered four notes with maturities of up to 10 years, while the Export-Import Bank of China priced two securities, with the longest due in February 2031. The frenzied activity by the policy banks—lenders set up by the government to promote its policy objectives—marked their busiest day of new issuances since 2012, Bloomberg data also confirmed.
India’s top nine private-sector banks posted a combined net profit of ₹436.4 billion during the June quarter, marking 2.7 percent year-on-year growth. Nonetheless, modest economic growth and tepid credit demand saw this growth figure sharply cut from the first quarter, during which analysis from The Economic Times (ET) showed that the combined profits of the nine lenders had climbed by a staggering 19 percent YOY. According to the Indian business-news daily, growth in the second quarter was hindered by sluggish credit and deposit expansion, and with core business momentum remaining weak, treasury gains played a significant role in supporting profitability.
The ET also identified subdued performances at Axis Bank, Kotak Mahindra Bank (KMB), IndusInd Bank, RBL Bank and IDFC First Bank as responsible for dragging down the overall earnings of the private banks, which had enjoyed considerable valuation gains during recent quarters. “The sum and substance is that the economy is grappling with lower growth; there are job creation and employment issues, and there is stress manifesting as financials are seeing non-performing loans,” Suresh Ganapathy, the head of financial services research at Macquarie Capital, told the ET. “The stress is more in the middle-income segment and also at the bottom of the pyramid.”
The Indonesian government confirmed it would levy an Article 22 income tax of 0.25 percent on gold bullion purchases made by the country’s new bullion banks starting August 1, 2025. The policy will apply to both domestic gold transactions and imports, while end consumers will be exempt, with the director general of taxes at the Ministry of Finance, Bimo Wijayanto, confirming that the regulations aim to prevent overlapping tax collections on gold transactions conducted by bullion banks.
Bullion banks were first launched in February of this year, with the aim of strengthening Indonesia’s downstream gold sector and thus maximising economic benefits within the country from gold processing, trading and financing. According to President Prabowo Subianto, the bullion banks could generate substantial savings in foreign exchange (FX) by ensuring the entire gold supply chain remains onshore.
Given that much of the gold mined in Indonesia ends up being held overseas, the savings could prove to be substantial. “We hope this (bullion banking system) will increase our gross domestic production. If I am not mistaken, it can add Rp245 trillion (to the gross domestic product), it will also open up 1.8 million new jobs,” the president noted at the time.
Indonesia’s Financial Services Authority (OJK) also recently told commercial lenders across the country to block roughly 26,000 bank accounts suspected of being connected to online gambling activities. The crackdown comes as authorities contend that the practice is fuelling social and economic harm, with the government making sweeping efforts to stamp out illegal online gambling altogether, an activity that Jakarta claims has become rampant and is disproportionately affecting low-income communities.
“The OJK has instructed banks to freeze 25,912 accounts based on data provided by the Communication and Digital Affairs Ministry,” said Dian Ediana Rae, chief executive for banking supervision at OJK, on August 4. The regulator has also asked banks to verify the identities of account holders using Indonesia’s national ID number (NIK) system and to carry out enhanced due diligence before permanently closing the accounts.
In its “Macroeconomic Review” for July 2025, the Monetary Authority of Singapore (MAS) confirmed that Singapore’s gross domestic product (GDP) growth had been stronger than expected but also cautioned that GDP growth was projected to slow in the coming quarters. In the near term, moreover, inflationary pressures would remain contained, with headline and core inflation rates forecasted to average 0.5–1.5 percent this year. Given the backdrop of the US’ tariff regime, this stable forecast should provide considerable confidence to Singaporean consumers and businesses.
MAS Core Inflation averaged 0.6 percent year-on-year (YOY) in the second quarter (Q2), unchanged from the preceding quarter. “The impact of hikes in water prices and health insurance premiums offset easing inflation in most other categories,” the review stated, noting that inflation was low across a broad range of core goods and services and that the share of components with year-on-year inflation below their historical averages had risen.
“On the whole, inflation fell in most major CPI categories in Q2. Notwithstanding the water price hike in April, retail goods inflation turned more negative in y-o-y terms, as price declines intensified across a wide range of goods including clothing & footwear, ICT equipment and personal effects,” the MAS also noted. “Notably, services inflation also remained below its historical average, with inflation for recreational services easing, and that for travel-related services turning more negative. Food inflation also declined alongside a slowing in the pace of price increases for non-cooked food as well as restaurant food services.”
As of June 30, 28 commercial banks in Vietnam reported a combined total of 279,518 employees, which was 2,857 fewer than they reported as of December 31, 2024. Second-quarter financial reports revealed that 13 banks trimmed their staff numbers during the first six months of 2025, while the other 15 lenders increased their headcounts. Nonetheless, the total number was down from six months earlier.
According to local outlet DTiNews, LPBank (Fortune Vietnam Joint Stock Commercial Bank) accounted for the sharpest reduction, cutting 1,986 jobs to 9,203 employees, followed by VIB (Vietnam International Commercial Joint Stock Bank)and Sacombank (Saigon Thuong Tin Commercial Joint Stock Bank), which both downsized by more than 1,000 staff each, with VIB slashing 1,186 jobs to leave the total headcount at 10,137 employees. Sacombank also reduced a substantial number (1,158) to bring its total employee number to 15,900. Other banks with significant reductions included ACB (Asia Commercial Bank)—down 607, ABBank (An Binh Commercial Joint Stock Bank)—469, Agribank (Vietnam Bank for Agriculture and Rural Development)—273 and Vietcombank (Joint Stock Commercial Bank for Foreign Trade of Vietnam)—191.
In contrast, VPBank (Vietnam Prosperity Joint Stock Commercial Bank) added the most staff since the start of the year, hiring 677 to reach 15,680 in total. BIDV (Joint Stock Commercial Bank for Investment and Development of Vietnam)followed with 606 new hires, while MB Bank (Military Commercial Joint Stock Bank) and Techcombank (Vietnam Technological and Commercial Joint Stock Bank) grew their headcounts by 468 and 329 employees, respectively. In terms of overall staff numbers, state-owned banks continued to dominate, with Agribank leading at 40,691 employees, followed by BIDV (26,675), Vietcombank (23,347) and VietinBank (Vietnam Joint Stock Commercial Bank for Industry and Trade) (22,507). Among private banks, Sacombank remained the largest employer, followed by VPBank.
The DTiNews report also noted that experts had attributed the workforce cuts primarily to Vietnam banking’s ongoing digital transformation, which has prompted banks to streamline operations and shift services online. But while VietinBank closed the most branches during the six-month period, it nonetheless managed to increase its headcount slightly by 15.
In its Statement on Monetary Policy for May 2025, the Reserve Bank of Australia (RBA) confirmed that inflation in Australia had continued to ease and that the unemployment rate was low. The central bank also cautioned that the global economic outlook had worsened and become more unpredictable.
“In Australia, inflationary pressures have continued to ease, and both headline and underlying inflation are within the 2–3 per cent range. The unemployment rate has remained steady, and employment growth has remained firm, but the pick-up in household consumption seems to be a bit softer than previously expected,” the report noted, adding that the global economic outlook had worsened following the introduction of higher tariffs by the United States and a significant increase in uncertainty related to trade policies.
“This is expected to weigh on Australia’s domestic activity and inflation in the forecast period, slowing the pick-up in GDP growth a little while inflation returns sustainably to around the midpoint of the target,” the RBA added, noting that survey measures of households’ short-term inflation expectations had appeared “mostly unaffected by the tariff announcements, although the series are volatile”. As such, the central bank concluded that inflation expectations remained consistent with achieving its 2-3-percent inflation target over time.
Since the publication of the May statement, however, more recent data from the RBA showed a pronounced uptick in consumer and business inflation expectations for the quarter ended June, suggesting that concerns may be mounting that tariffs will push prices higher than was initially forecast.
Nonetheless, the break-even 10-year inflation rate, which measures the average annual inflation rate implied by the difference between the 10-year nominal bond yield and the 10-year inflation-indexed bond yield, remained subdued and even trended lower towards 2 percent during the June quarter.
ANZ (ANZ Bank New Zealand Limited) and ASB (ASB Bank Limited), two of New Zealand’s biggest banks, have refused to settle a class-action lawsuit that could result in the lenders having to pay more than NZ$300 million to customers for allegedly overcharging them between 2015 and 2019. The lenders are accused of having breached New Zealand’s credit-disclosure laws. In August 2024, the Court of Appeal ruled that up to 100,000 customers of the two banks could join the class-action lawsuit—one of the biggest in the country’s history—with the claim initially filed against ANZ and ASB in 2021 for their supposed failures to refund interest and fees to 150,000 customers.
The Court of Appeal found that the banks’ actions placed unnecessary hurdles between customers and their entitlements, while the customers claimed the banks failed to make the required legal disclosures, instead imposing on borrowers several avoidable fees and interest charges. The offer on behalf of the customers was to settle for just over $300 million. However, the two lenders rejected the offer, arguing that the claims were excessive. ASB stated that it did not understand how the offer had been calculated and that it would not put an end to further legal actions. The banks have nonetheless refunded around NZ$43 million to date, following pressure to do so by regulators.
New Zealand’s Inland Revenue Department, meanwhile, is set to procure open-banking technology for the first time, having issued a Request for Proposal (RFP) on July 14 for aspirant suppliers. The request follows its issuance of a Request for Information (RFI) to potentially procure “open banking and related technologies” in February, when the department stated that private-sector suppliers had the “chance to help us shape the future of payments using open banking end-to-end API services in the financial industry”.
The RFP stated that the Inland Revenue was seeking proposals with respect to the ongoing provision and implementation of open banking in bank-account validation and payment services. “As with the initial RFI, the move is a significant milestone in New Zealand and also globally as the latest example of a government agency exploring the use of financial technology to improve what they do,” according to Global Government Fintech, a publication focussed on innovation in the public sector. “It is an apparent ‘first’ in New Zealand because the department is believed to be the country’s first public sector body to launch an open banking-related ‘go-to-market’ initiative.”
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