TOP NEWS IN EUROPEAN FINANCIALS
* The U.S., EU, U.K. and Canada agreed to remove "selected Russian banks" from the Swift interbank messaging system as part of the latest round of sanctions targeting Russia over its military operations in Ukraine. They also agreed to impose restrictive measures aimed at preventing the Russian central bank from deploying its international reserves in ways that undermine the impact of the sanctions, the European Commission said.
* Bank of Ireland Group PLC swung to a full-year 2021 profit of €1.06 billion from a year-ago loss of €707 million. In a statement, CEO Francesca McDonagh said an update on the Irish lender's strategy and outlook to 2024 will be provided this year, including refreshed medium-term goals.
➤ How including gas and nuclear in the EU taxonomy could impact ESG investors
The European Commission's decision to include natural gas and nuclear power in the taxonomy has ignited a fiery debate over whether they should be described as sustainable.
➤ Credit card delinquency, net loss rates tick up while yields fall in January
Bank of America President and CEO Brian Moynihan noted during the bank's Feb. 17 conference presentation that paydown rates on cards are starting to slow.
➤ YOY credit quality improvement continues in Q4'21
Credit trends are expected to normalize as the impact from pandemic relief efforts dissipates and labor costs increase, but credit quality finished 2021 at historically strong levels.
BANKING
* France's Société Générale SA and Switzerland-based Credit Suisse Group AG paused commodities trading financing from Russia following sanctions against the country, insiders told Bloomberg News. Dutch banks ING Groep NV and Rabobank have also reportedly restricted financing deals to move commodities from Russia to Ukraine. SocGen and Credit Suisse declined to comment, according to Bloomberg.
* The Government Pension Fund Global, Norway's $1.3 trillion sovereign wealth fund, will pull out of all investments in Russia, S&P Global Platts reported, citing the Norwegian government. As of 2020, the fund had interests in companies including banks such as Bank Saint-Petersburg PJSC.
* Credit Suisse pitched to the U.S. Department of Justice potentially helping to build a case on block trading against other global investment banks, sources told Bloomberg. The Swiss bank, still seeking to move past its costly exposures to family office Archegos Capital, could avoid regulatory sanctions and hold leverage in recovering losses if it can persuade authorities that other banks acted improperly, according to the report. Representatives for Credit Suisse, the DOJ and other banks declined to comment to Bloomberg.
* Czech lender Sberbank CZ a.s., controlled by Sberbank of Russia via Sberbank Europe AG, said it would not open its branches Feb. 28 due to an outflow of client funds caused by the "unfavorable geopolitical situation."
* Erste Group Bank AG's fourth-quarter 2021 net result attributable to owners of the parent grew year over year to €472 million from €146 million, as did its full-year net result, to €1.92 billion from €783.1 million. The Austria-based bank said the conflict between Russia and Ukraine has no direct impact on it as it has no direct operating units in these two countries and exposures to both are negligible.
* Belgium-based Belfius Bank SA posted a full-year 2021 net income group share of €935 million — its best ever net result — up from €532 million in 2020.
* Türkiye Is Bankasi A.S. plans to raise its paid-in capital to 10 billion Turkish lira from 4.5 billion lira by distributing bonus shares, Bloomberg reported, citing a regulatory filing. Other Turkish banks have announced similar measures to maintain credit growth and support the economy.
* LHV UK Ltd., a unit of Estonia-based AS LHV Pank, applied for a banking license in the U.K., AltFi.com reported.
* Portugal-based Caixa Central de Crédito Agrícola Mútuo CRL said there was "no justification" for the €350,000 fine imposed by the Competition Authority in a case in which 14 banks were convicted of sharing sensitive information, calling for acquittal, Economia Online reported.
FINANCIAL SERVICES
* U.K.-based payments group Wise PLC appointed Finance Director Kingsley Kemish interim CFO while CFO Matthew Briers is recovering from a bicycle accident, Dow Jones Newswires reported.
POLICY AND REGULATION
* The ECB and the Single Resolution Board, or SRB, declared that Sberbank of Russia's EU units — Austria-based Sberbank Europe, Sberbank dd in Croatia and Sberbank banka dd in Slovenia — are failing or likely to fail after experiencing rapid and significant deposit outflows as a result of the reputational impact of geopolitical tensions, leading to a deterioration of their liquidity situation. The Austrian Financial Market Authority has imposed a temporary moratorium on Sberbank Europe from today until March 1 on behalf of the SRB, disallowing it to make any payments, transfers or other transactions.
* Russia's central bank implemented various measures to provide support for the Russian banking systems amid sanctions imposed by the U.S., EU, U.K. and other countries. The regulator allowed banks to dissolve from Feb. 28 the accumulated macroprudential capital buffer for unsecured consumer loans and mortgage loans in rubles and foreign currency, totaling 733 billion rubles. The central bank also eased restrictions on banks' open foreign-currency positions and pledged to continuously provide local lenders with cash and non-cash liquidity in rubles.
* Sweden's Financial Supervisory Authority is criticizing Klarna Bank AB (publ) after a major technical crash in 2021 allowed some users to see information about other customers, Dagens Industri reported. Sanctions might be forthcoming in the near future. Klarna did not comment on the criticism from the regulator.
Erin Tanchico, Arno Maierbrugger, Danielle Rossingh, Gerard O'Dwyer, Beata Fojcik, Heather O'Brian, Brian McCulloch, Praxilla Trabattoni and Nelson Siqueira contributed to this report.
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