Royal Bank of Scotland, the bank controlled by the British government, said on Thursday that it planned to cut an additional 3,500 jobs and close 10 offices in Britain to reduce costs.

The job cuts, which represent about 2 percent of the remaining work force, would affect staff members working in its technology department and in administration. The bank has already eliminated more than 15,000 jobs over the last two years. The bank said it would close offices in Leeds, Bolton and Bradford and seven other places across the country.

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Dispatches: Chinese Insurers Make Moves Into Banking:  China Pacific Insurance plans to spend 5bn yuan (HK$5.71bn) on shares placed privately by Shanghai Rural Commercial Bank, the Shanghai Securities News reported, quoting market sources. (The Standard)

Ping An Insurance, China's second-largest insurer, will merge its bank unit into Shenzhen Development Bank in a deal valued at about 29.1bn yuan (HK$33.21bn ) to consolidate banking operations and comply with a government regulation.

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Support Of Anglo Irish Bank Strains Ireland: Anglo Irish Bank, the midsize Irish lender whose profligacy has come to symbolize the excesses of the real estate bubble here, is doing its best to find out, Landon Thomas Jr. reports in The New York Times.

No other country aside from Iceland suffered a banking bust as severe as Ireland’s during the financial crisis. Ireland was also the country that took the most direct route in tackling the problem, by recognizing upfront the bad loans of its devastated banks and transferring them to government ledgers.

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Fitch Raises Bank  Of America Preferred Stock Rating Above Junk: Fitch Ratings has upgraded Bank of America Corp.'s (BAC) preferred stock rating to investment grade, citing the banking giant's efforts to boost common equity and liquidity as well as improving asset quality in its various loan portfolios.

The credit rater Friday pointed out that capital-raising efforts by the nation's largest bank by assets boosted its Tier I common ratio to 8% at the middle of this year from 6.9% a year earlier.

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Bank customers fighting high overdraft fees got a boost on Tuesday with a win in federal court in California against Wells Fargo & Co., but that case has limited legal impact. A similar federal court case filed in Florida against 30 banks including Wells Fargo, Bank of America, Citibank and others could mean much more.

At issue is the practice of banks processing debit payments according to their size, from largest to smallest, rather than by the timing of which transaction came first. This drains customer bank accounts faster, causing them to pay more overdraft fees.

In the California decision, U.S. District Judge William Alsup accused Wells Fargo of "profiteering" by changing its policies to process checks, debit card transactions and bill payments from the highest dollar amount to the lowest. He referred to the practice as "gouging and profiteering."

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The group, which had to be bailed out by the Dutch government during the financial crisis, is gradually splitting its insurance and banking operations to comply with demands set by regulators in Brussels to offset the state aid that it received. ING said it still expected the insurance business to be operating “on an arm’s length, stand-alone basis” by the end of the year.

Echoing recoveries by other banks that were hit hard in the financial crisis, ING’s second-quarter earnings boost came in ahead of analyst expectations. That recovery has mostly been recorded among lenders with strong retail operations rather than in investment banking, where trading profits have fallen across the board.

China’s banking regulator has ordered lenders to set aside provisions for loans they’ve transferred to trust companies to cushion against potential risks, three people with knowledge of the situation said. The loans must be transferred back onto the balance sheets of banks by the end of 2011, the people said, declining to be named as the matter isn’t public. Banks have been told to prepare provisions equal to 150 percent of potential losses from these so-called off balance sheet loans, they said.

More than 2.3 trillion yuan ($340 billion) of outstanding credit was in investment products and off the balance sheets of Chinese banks at the end of June, distorting loan figures, Fitch Ratings said July 14. Large banks were told to set aside additional capital for the off-the-balance-sheet assets if they need to in order to meet the nation’s current 11.5 percent capital adequacy requirement, the people said. Reuters reported the order to take back loans from trust companies earlier today.

Commonwealth Bank Bendigo and Adelaide Bank reported an increase in net profit for the fiscal year ending June 30 to A $ 83,8 million to A $ 242,6 million ($ 223 million). Analysts on average expected profit at A $ 264,3 million, almost three-fold increase in profit attributable to higher income from lending and reducing the number of “bad” debts.

According to an SBP report, the bank is already operating a network of about 60 Islamic banking branches across the country. After the subsidiary is formally launched, Bank Alfalah will become one of the largest three Islamic banks in the country.

According to sources, SBP had planned out a three-step roadmap to encourage Islamic banking in Pakistan. This plan included the establishment of full-fledged Islamic banks, the provision of services through dedicated Islamic branches of conventional banks and the establishment of subsidiary Islamic banks of already existing financial institutions in the country.

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The State Bank of Pakistan (SBP) may hike discount rate by a further 100 basis points (bps) in the current fiscal year (starting in July 2010), taking the overnight deposit and lending rates to 11 percent and 14 percent, respectively.

“SBP has hiked rates in an attempt to pre-empt the deterioration in the FX reserves position and to support a stable Pakistani rupee,” said an economist at Standard Chartered Bank (Pakistan) Limited, Sayem Ali. The SBP raised policy rates by 50bps on 30 July in a pre-emptive move to counter inflationary pressures. The rate hike surprised.

The markets, given the decline in headline inflation and the strengthening of FX reserves to record levels since the last policy meeting in May 2010. The hawkish tone of the policy statement indicates that the SBP sees inflation posing a significant challenge ahead and stands ready to raise rates further. This makes additional hikes likely, given the government’s expansionary fiscal stance and strong possibility that it will miss key revenue and deficit targets.

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