TOP NEWS IN EUROPEAN FINANCIALS
* Six former and current executives at Credit Suisse Group AG are being questioned by prosecutors in Geneva over a long-standing investigation into the Switzerland-based bank's potential criminal liability over the fraud led by Patrice Lescaudron, one of its former star bankers, Bloomberg News reported. Lescaudron was convicted in 2018 and last year committed suicide.
* French payments startup Lydia Solutions SAS reached unicorn status after raising $103 million in its latest funding round, bringing its total valuation to more than $1 billion, Les Echos reported. The company aims to become the main current account for 10 million Europeans by 2025.
➤ European banks' payout ratio rises amid 'catch-up' dividends, buybacks
Banks including ING, BBVA and Nordea have kicked off share repurchase programs, while the likes of Swedbank, SEB and DNB have paid extra dividends to shareholders in the fourth quarter of 2021, after getting the green light from regulators.
➤ Bad breadth plagues Nasdaq as mega-cap stocks mask market weakness
Without its five largest stocks, the Nasdaq Composite Index is down more than 22% on the year.
BANKING
* Spain-based Banco Santander SA will roll out Santander PathFinder, a pure-play robo-adviser with digital adviser and technology provider SigFig, the Financial Times wrote, citing regulatory filings. The adviser will reportedly target clients with at least $2,000 to invest.
* Caixa Económica Montepio Geral, or Banco Montepio, sold a €356.8 million portfolio of consumer loans, Jornal de Negócios wrote. The sale will reduce risk-weighted assets on the Portuguese bank's balance sheet by €265 million.
* French banks were notified that they will pay significantly less to the unique resolution fund set up to reduce the need for government money in the case of bank failures following a change in the calculation method, Les Echos reported. French banks are currently the largest contributors to the fund, having paid €3 billion, equating to 32% of the total contributions.
* BNP Paribas Bank Polska SA increased provisions related to its Swiss franc mortgage exposure by 580 million Polish zlotys in the fourth quarter, with their total value reaching 1.3 billion zlotys, Rzeczpospolita reported. The BNP Paribas SA unit also recently completed a pilot franc mortgage settlement campaign for its clients and decided to extend the program to include more borrowers.
* Foreign-currency mortgages remain the main source of risk for Poland's financial system, but the probability of the most adverse scenarios stemming for banks from their disputes with franc mortgage holders has decreased, the country's central bank said in its latest Financial Stability Report.
FINANCIAL SERVICES
* Jean Pierre Mustier, the former CEO of Italian bank UniCredit SpA, and his partners are listing a second special purpose acquisition company called Pegasus Entrepreneurial Acquisition Co. Europe BV, which intends to raise up to €200 million in Amsterdam by issuing 20,000,000 units at €10 each, according to a filing. Earlier this year, Mustier and billionaire partner Bernard Arnault raised roughly €500 million from their first SPAC, Pegasus Acquisition Company Europe BV, Reuters noted.
* U.K.-based financial technology firm Zopa Ltd. will withdraw from peer-to-peer lending by the end of January 2022 and instead focus more on its banking and credit card business, according to AltFi. CEO Jaidev Janardana attributed the decision to the tighter regulation of the P2P sector and the increasing negative retail investor sentiment on the sector during the COVID-19 crisis. Zopa's loan portfolio will be transferred to its banking unit, City A.M. added.
POLICY AND REGULATION
* Government support measures amid the COVID-19 pandemic have prolonged a low interest rate environment and materially increased available liquidity in the eurozone, leading market participants to take a "complacent attitude," according to Andrea Enria, chair of the ECB's supervisory board. In a supervision blog post co-authored with Mario Quagliariello, director of supervisory strategy and risk at the central bank, Enria said that as some banks have started releasing provisions, the ECB will continue pressing them to properly classify loans and timely recognize deteriorating asset quality.
* In a new report, the Dutch central bank heavily criticized banks, insurers and pension funds in the country for not sufficiently taking climate risks into account in their portfolios, such as the loss of value of investments in fossil fuels, Het Financieele Dagblad reported. The regulator also flagged concerns about banks' lack of progress when it comes to detecting money laundering, crime and terrorism financing, the newspaper noted.
* The U.K. Financial Conduct Authority proposed new rules requiring financial institutions to support their clients to "make good financial decisions" in a bid to uphold consumer protection. The regulator wants companies to go a step further by showing customers evidence of good outcomes instead of just meeting product governance rules, Reuters noted.
INDUSTRY NEWS
* Western countries should implement strict economic sanctions against Russia if it decides to invade Ukraine, including disconnecting the country from the SWIFT international payment system, Latvian Foreign Minister Edgars Rinkēvičs told Reuters. The statement comes in light of U.S. intelligence reports suggesting that Russia could be planning an invasion of Ukraine, which Moscow denied.
* The ECB named Oscar Arce director general for economics, a key role that entails preparing the central bank's growth and inflation projections, Reuters noted. Arce is the director for economics, statistics and research at the Spanish central bank.
* The U.S. was the top destination for financial services exports from the U.K. in 2020, surpassing the EU, the Financial Times reported, citing research from lobby group TheCityUK. The U.S. took up 34.2% of sector exports last year, versus 30% from the bloc.
* Denmark plans to issue green bonds in January next year, subject to market conditions, its central bank said.
* Tom Hayes, the former banker convicted of manipulating the Libor benchmark rate, lost an appeal request against his conviction, with the U.K. Criminal Cases Review Commission provisionally ruling that it would not refer the case to the Court of Appeal, City A.M. reported. Hayes has until Feb. 4, 2022, to make further submissions.
Deza Mones, Daniel Stephens, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Heather O'Brian, Brian McCulloch, Praxilla Trabattoni and Mariana Aldano contributed to this report.
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