Big Spanish banks set for interest income boost; Credit Suisse in hot water anew

S&P Global Market Intelligence offers our top picks of banking news stories and more published throughout the week.

Spain's largest banks are on course to book higher net interest income as the European Central Bank looks to raise interest rates to curb increasing inflation.

Banco Bilbao Vizcaya Argentaria SA, CaixaBank SA and Banco de Sabadell SA all booked lower net interest income, or NII, from domestic operations in 2021 than in 2020, while the NII of Banco Santander SA rose by 0.9%. BBVA's and Sabadell's NII in Spain has been on the decline for at least six consecutive years.

Further support for Spanish banks' NII in 2022 is already appearing in market interest rates, with the Euribor 12-month lending rate recovering to negative 0.232% March 16 from a record low of negative 0.518% Dec. 20, 2021.

Focus on Credit Suisse

* U.S. lawmakers asked Credit Suisse Group AG to hand over documents detailing its compliance with sanctions over Russia's invasion of Ukraine following a Financial Times (London) report saying the bank had asked investors to destroy documents relating to yachts, private jets and other assets of its wealthiest clients. Credit Suisse has ceased taking on new client business in Russia, a spokesperson told The Wall Street Journal.

* Bermuda's Supreme Court ruled that Credit Suisse should pay former Georgian Prime Minister Bidzina Ivanishvili more than $500 million in damages as the bank failed to prevent the fraud committed by convicted former banker Patrice Lescaudron, news outlets including the WSJ and Reuters reported.

* Activist investor group ShareAction called on Credit Suisse to further strengthen its climate commitments and urged shareholders to vote for its resolution requiring additional disclosures from the bank.

Ripple effects of Russia-Ukraine war

* HSBC Holdings PLC is turning away prospective Russian clients and is refusing new credit to some existing customers, sources told Reuters. Swiss bank UBS Group AG has also ceased taking on new business in Russia, Chairperson Axel Weber told Bloomberg News.

* Commerzbank AG warned in its annual report of "numerous risk factors" potentially affecting its 2022 profit forecast amid international sanctions against Russia. Its Poland-based mBank SA unit also said it will not pay dividends from its potential profit for 2022.

* Rabobank and its DLL subsidiary are winding down their activities in Russia and will leave the country. The Dutch bank said its aggregated direct net exposure to Russia was approximately €300 million as of March.

* Germany-based VTB Bank (Europe) SE has been put up for sale after being cut off from its Russian parent, VTB Bank PJSC, due to sanctions, Bloomberg reported. U.K.-based VTB Capital is also expected to be placed under special administration or a liquidation process, sources told Sky News.

* Raiffeisen Bank International AG said there was no spillover risk for the group from the conflict in Ukraine, and its exposure to Russia "is well within the limits," ensuring resilience under all possible scenarios. The Austria-based bank's Russian unit will reduce lending in the country, Kommersant cited RBI CEO Johann Strobl as saying.

Stakes, sales

* The U.K. government's stake in NatWest Group PLC fell to approximately 48.1% from roughly 50.6% after the disposal of 549,851,147 shares via an off-market purchase by the bank for some £1.21 billion.

* BBVA secured regulatory approval to launch a voluntary tender offer for the 50.15% stake it does not already own in Turkey-based unit Turkiye Garanti Bankasi AS for 12.20 lira per share.

* Denmark-based Lunar A/S offered to acquire Norwegian digital bank Instabank ASA for €132 million.

Legal affairs

* A U.S. federal judge dismissed a lawsuit accusing 10 global banks — including Barclays PLC, NatWest, Credit Suisse, UBS and BNP Paribas SA — of manipulating the market for U.S. Treasury securities, Reuters reported.

* German authorities raided Barclays' Frankfurt offices in relation to an investigation into historic so-called cum-ex trades, Bloomberg reported.

In other news

* Barclays expects to book an impact of roughly £450 million after securities offered and sold under the British bank's U.S. shelf registration statement exceeded the registered amount by about $15.2 billion. The estimated loss is expected to reduce the group's common equity Tier 1 ratio by about 14 basis points and will push the launch of its planned £1 billion share buyback to the second quarter. The bank has stopped selling new retail structured products in the U.S. after the blunder, which U.S. authorities are reportedly investigating, the FT wrote.

* UBS launched a new two-year share buyback program of up to $6 billion after concluding its 2021 program March 29.

* Germany-based Landesbank Baden-Württemberg, Landesbank Hessen-Thüringen Girozentrale and Landesbank Hessen-Thüringen Girozentrale reported higher profits in 2021 than in 2020.

* The Czech central bank raised its key rate by 0.50 percentage point to 5.00%.

Featured during the week on S&P Capital IQ Pro:

War, rate hikes mar growth prospects for global investment banking activity: Tightening financial conditions and the spike in geopolitical risk will hit investment banks' underwriting and deal advisory revenues in 2022.

Rate hikes fuel net interest income rebound at Polish, Czech, Hungarian banks: NII at Polish, Czech and Hungarian lenders will continue to improve thanks to multiple rate hikes as local central banks step up efforts to combat inflation amid the Russia-Ukraine conflict.