TOP NEWS IN EUROPEAN FINANCIALS
* Germany's Aareal Bank AG expects to report a consolidated operating loss in a double-digit-million euro amount for 2020. However, the bank aims to pay out €1.50 per share in dividends for the year. It expects to post a consolidated operating profit of about €300 million in 2023.
* Banca Monte dei Paschi di Siena SpA aims to return to profitability from 2022 as part of a five-year plan that also includes capital reinforcement of €2.0 billion to €2.5 billion. The Italian lender expects to close 100 branches in 2021 to 2022 and to reduce its workforce to 18,880 in 2025 from 21,549 in 2020 as part of the strategic plan that was preliminarily approved by the board in December.
➤ Policyholder groups declare victory after UK Supreme Court insurance ruling
The U.K.'s highest court largely allowed the Financial Conduct Authority's appeals and said the Orient Express case, which insurers relied on in their arguments, was "wrongly decided" and "should be overruled."
➤ Biden's $1.9 trillion relief plan seen accelerating US recovery, debt hangover
"In terms of pushing the economy to pre-pandemic levels, this will certainly help achieve that even faster than predicted," said Erik Lundh of the Conference Board. "The downside risk, however, is it renews concerns about the government debt."
BANKING
* Moscow-based Sberbank of Russia earned 781.6 billion rubles in 2020 under Russian accounting standards, a drop of 7.7% year over year, Vedomosti reported.
* Denmark-based Sydbank A/S is open to acquiring more banks, having purchased Alm. Brand Bank A/S in November, CEO Karen Frøsig told Børsen. However, future mergers are conditional upon Sydbank being the continuing institution. Sydbank also introduced a new fee of 50 kroner per month for customers with a business volume of less than 300,000 Danish kroner, Børsen reported.
* Italian bank Intesa Sanpaolo SpA sold Banca Popolare di Puglia e Basilicata SCpA 26 branches previously owned by Unione di Banche Italiane SpA for €8.9 million, Il Sole 24 Ore reported. Intesa also securitized a €1.3 billion portfolio of 42 renewable energy project financing loans, marking only the second deal of its kind in the sector in Europe, the newspaper said.
* Switzerland's Hypothekarbank Lenzburg AG made a CHF18.1 million profit for 2020, a fall of 14% compared to 2019, Finanz und Wirtschaft reported. The regional bank is sticking to its planned dividend payout.
* Spain's banks are leading the way in Europe in terms of refinanced nonperforming loans. According to the latest data published by the ECB, some €40.74 billion of their problem loans have been restructured, Expansión reported.
* Poland-based Bank Pekao SA's 2020 earnings may be 40% lower year over year due to low interest rates and a high cost of risk, the bank told Reuters.
* Bank of Ireland Group PLC is planning to close a significant portion of its operations in Northern Ireland, insiders told The Irish Times.
* U.K. bank Standard Chartered PLC is getting ready to cut hundreds of jobs as it restarts restructuring plans that were interrupted by the coronavirus pandemic, Bloomberg News reports.
* Cypriot bank Bank of Cyprus Holdings PLC reached an agreement with U.S. asset manager Pacific Investment Management Co. LLC to sell a portfolio of nonperforming loans with a gross book value of €545 million.
* Edmond de Rothschild Holding SA Chairman Benjamin de Rothschild died in Switzerland following a heart attack Jan. 15. Ariane de Rothschild will take over the chairmanship, Les Echos reported.
FINANCIAL SERVICES
* Swiss asset manager GAM Holding AG expects to report an IFRS 2020 net loss of about CHF380 million, compared to a net loss of CHF3.5 million in 2019.
* Deutsche Bank AG Supervisory Board Member Alexander Schütz wrote to Wirecard AG's Markus Braun in February 2019 calling on the collapsed German payments firm's former CEO to show more dedication in rebutting the Financial Times' reporting on Wirecard.
* Netherlands-based wealth manager Van Lanschot Kempen NV completed the acquisition of Hof Hoorneman Bankiers NV, having received regulatory approval.
* NYSE-listed Brown & Brown Inc. has completed its acquisition of the general insurance operating companies of O'Leary Insurances. The independently owned Ireland-based brokerage offers commercial and personal insurance services.
* Switzerland-based Zurich Insurance Group AG may drop out of Russia’s Nord Stream 2 project because of likely U.S. sanctions against European companies that support construction of the gas pipeline, Reuters reproted.
* The general meeting of Eika Gruppen AS voted against listing insurer Eika Forsikring AS on the stock exchange, Finanswatch.no reported. The listing was suggested by the banks in the Lokalbank alliance, but was not recommended by the group's board.
POLICY AND REGULATION
* ECB Governing Council Member Yannis Stournaras told a banking forum that there is a widespread view that many EU banks are underestimating their credit losses from the pandemic, Reuters reported.
* The ECB is planning to impose additional capital requirements on banks that do not take adequate action to tighten risk controls in the leveraged loan market, insiders told the Financial Times.
* The Polish central bank said local banks should not count on the central bank to help them deal with the costs related to solving the sector's Swiss franc mortgage problem, Parkiet reported. The central bank could also introduce negative interest rates in the event of a serious deterioration of the economic situation in Poland, the newspaper noted.
* Poland's Financial Supervision Authority asked Commerzbank AG unit mBank SA, Banco Santander SA unit Santander Bank Polska SA and Bank Pekao not to pay out dividends in the first half of 2021, Parkiet wrote.
INDUSTRY NEWS
* Former French President Nicolas Sarkozy faces investigation over a €3 million contract he signed with Russian insurance company SPAO RESO Garantia, The Guardian reported. Investigators want to find out if Sarkozy was hired to lobby on behalf of the company, which could result in a charge of influence-peddling, the newspaper noted.
* The U.K. finance ministry has set out legislation in the parliament that allows the country's exchanges to be able to offer trading in Swiss shares from or just after Feb. 3, Reuters reported.
MARKETS
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Ben Meggeson, Daniel Stephens, Meike Wijers, Esben Svendsen, Beata Fojcik, Heather O'Brian, Stéphanie Salti, Praxilla Trabattoni and Mariana Aldano contributed to this report.
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