TOP NEWS IN EUROPEAN FINANCIALS
* U.K.-based bank NatWest Group PLC confirmed that it intends to begin a phased withdrawal from Ireland over the coming years, saying the move came after its conclusion that unit Ulster Bank Ireland DAC will not be positioned to achieve an acceptable level of sustainable returns over its planning horizon. The lender's statement came as it swung to a loss attributable to ordinary shareholders of £109 million in the fourth quarter of 2020 from a year-ago profit of £1.41 billion. Despite the loss, NatWest's board recommended a final dividend of 3 pence per ordinary share for 2020.
* Swiss Re AG swung to a full-year 2020 net loss attributable to common shareholders of $878 million from a year-ago net income of $727 million, mainly due to a $3.9 billion charge on COVID-19 claims and reserves. Despite the loss, the company's board will propose a dividend of CHF5.90 per share, saying the payout reflected its "very strong capital position" and "positive market outlook."
➤ UK banks' COVID-19 loan debts could see costs increase amid tax hike fears
Recovering bad debts on government-backed pandemic loans is set to result in higher costs, while widespread failure to pay could sour relationship between banks and government leading to tax hikes, said analysts.
➤ Credit Suisse cuts 2020 bonus pool, sets cautiously optimistic tone for 2021
Switzerland's second-largest bank by assets said the reduction was not a trend, as bonuses are performance-based.
➤ Robust performance of Barclays' i-bank counters pandemic headwinds
CEO Jes Staley's commitment to the investment banking arm pays off as it turns in strong performance, while the bank is criticized for being overly-cautious on impairments
BANKING
* Irish bank AIB Group PLC has entered into a nonbinding memorandum of understanding with NatWest Holdings Ltd. to acquire an approximately €4 billion loan portfolio from Ulster Bank Ireland. Local peer Permanent TSB Group Holdings PLC, meanwhile, said it is in talks with NatWest Group to acquire certain elements of its Ulster Bank businesses in Ireland.
* Germany's Deutsche Bank AG is backing down from a plan to increase its bonus pool by about a third after facing opposition from the ECB, insiders told Bloomberg News. The lender reportedly sought to pay staff bonuses of over €2 billion for 2020, higher than the €1.52 billion it awarded for 2019, but has reduced the amount following several meetings with the regulator in recent months.
* Dutch bank ING Groep NV said it is leaving the Czech retail banking market by 2021-end but will remain active in the country as a provider of wholesale banking products and services.
* Credit Suisse Group AG plans to gain 100% control of its securities venture in China "as soon as possible," Helman Sitohang, the Swiss lender's CEO for Asia-Pacific, told Bloomberg TV.
* Italy's Banco BPM SpA and the largest investor in its local peer BPER Banca SpA, insurer Unipol Gruppo SpA, have initiated work on a potential merger between the banks, Reuters reported, citing Italian newspaper La Stampa.
* German financial regulator BaFin has asked Greensill Capital (UK) Ltd. to lower its exposure to companies tied to metals magnate Sanjeev Gupta over concerns on the level of risk Greensill Bank AG is taking on a single client, insiders told the Financial Times.
* German savings bank Hamburger Sparkasse AG has increased by twelvefold its provisioning for loans at risk of default due to the coronavirus pandemic, to €49 million from €4 million in 2020, with a further increase to €90 million planned, according to Handelsblatt.
* Credito Valtellinese SpA investor Petrus Advisers said it would not accept the €10.5-per-share takeover offer from France's Crédit Agricole SA for Creval, saying it undervalued the Italian bank, MF and L'Agefi reported.
* Italy's Banca Carige SpA began procedures for the readmission of its shares to trading on the Milan stock exchange, with the expectation this could take place by summer, MF wrote.
* SpareBank 1 Nord-Norge acquired accounting company Lofotøy Regnskap as part of a strategy to increase the Norwegian bank's activities in the Lofoten region, particularly in the maritime and fisheries sectors, Finanswatch.no reported.
* U.K. digital bank Advanced Payment Solutions Ltd., which does business as Cashplus, has named Mark Sismey-Durrant its new chairman, City A.M. reported.
FINANCIAL SERVICES
* German insurer Allianz SE reported preliminary fourth-quarter 2020 net income attributable to shareholders of €1.82 billion, down from €1.86 billion a year earlier. The company said it will aim to boost its operating profit to €12 billion in 2021 from €10.75 billion in 2020, plus or minus €1 billion, and that its management board will propose a dividend for 2020 of €9.60 per share.
* French asset manager Amundi SA will back resolutions at company shareholder meetings this year calling for more transparency on their emissions reductions strategies and specific targets, saying its CEO, Yves Perrier, has written to 500 internationally listed firms outlining Amundi's priority issues of energy transition and social cohesion that will guide its voting policy in 2021.
POLICY AND REGULATION
* The U.K. Treasury is looking into possibly scrapping an EU rule that limits bankers' bonuses to boost the country's post-Brexit competitiveness, City A.M. wrote.
* The U.K. Financial Conduct Authority said it will announce an update on its 18-month probe on the suspension of disgraced financier Neil Woodford's flagship LF Woodford Equity Income Fund by May-end, Reuters reported. The move came after British lawmakers criticized the length of time the regulator was taking on the investigation amid plans by Woodford to set up a new fund.
* French insurance regulator ACPR implicitly gave the green light to dividend payments in the sector while calling for "great caution" until September, given the "strong uncertainties" linked to the crisis, Les Echos wrote.
INDUSTRY NEWS
* The European Banking Authority set out a final draft implementing technical standards on the disclosure of global systemically important institutions' indicators, saying the standards will help identify which banks are GSIIs.
* The European Banking Federation appointed Banco Santander SA Chairman Ana Botín as its new president for the next two years, replacing former UniCredit SpA CEO Jean Pierre Mustier, Europa Press wrote.
* HSBC Holdings PLC CEO Noel Quinn will chair the Financial Services Task Force aimed at promoting and accelerating climate change initiatives. The group, which was launched in January, also counts executives from Barclays PLC, BNP Paribas SA, Credit Suisse Group, Lloyds Banking Group PLC, NatWest Group and Standard Chartered PLC among its members.
Deza Mones, 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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