TOP NEWS IN EUROPEAN FINANCIALS
* The EU's upcoming package of sanctions against Russia will primarily target the country's banking sector, particularly Sberbank of Russia, Reuters reported, citing an interview with European Commission President Ursula von der Leyen by German newspaper Bild am Sonntag. Sberbank, Russia's largest bank by assets, has so far been spared from EU sanctions as it is one of the bloc's main payment channels for oil and gas, the news wire noted.
* Meanwhile, New Zealand imposed a new round of sanctions against 18 Russian financial entities — including Russia's central bank, Sberbank, VTB Bank PJSC and Gazprombank JSC — as part of the government's response to Russia's invasion of Ukraine.
* NatWest Group PLC is facing pressure from investor group The Investment Association over the U.K.-based bank's plan to increase the pay package for its top executives, The Times of London reported. Shareholder advisory group Glass Lewis also recently recommended that investors reject NatWest's new remuneration policy for executives, which is set for a shareholder vote over the next few days.
➤ European M&A activity dips in Q1 amid war, rising inflation
In the first quarter of the year, 246 deals were made, down from 278 in the same period a year earlier, S&P Global Market Intelligence data shows.
➤ Banks can expect less aggressive Fed regulation under Michael Barr
Bank regulation is likely to be more moderate if Michael Barr, U.S. President Joe Biden's nominee to be the Federal Reserve's vice chair for supervision, is confirmed.
➤ Private money flowing freely to energy transition companies, technologies
Venture capital and private equity investment in energy transition companies hit a 10-year high in 2021, reflecting investors' growing role in the global pursuit of net-zero goals.
READ MORE about the market reaction and industry impact of the evolving situation in Russia and Ukraine in our new Issue in Focus.
BANKING
* Italian lender BPER Banca SpA extended exclusive negotiations with Nexi SpA by a month over the potential sale of its merchant acquiring business unit. The talks were initially slated to end April 15, which was moved to May 15. The business could reportedly fetch a €350 million price tag.
* France-based Société Générale SA and Crédit du Nord SA will create a new French retail bank brand, with the retail bank expected to be operational in 2023, Dow Jones Newswires reported. In 2020, SocGen announced the decision to merge its Credit du Nord brand into its brand to boost its domestic retail banking operations.
* Lloyds Banking Group PLC's remuneration committee is looking at potentially clawing back more than £1 million of bonus and share incentives from former CEO António Horta-Osório due to the costly fraud scandal at the British lender's HBOS PLC Reading branch, The Mail on Sunday reported. The bank said variable remuneration awards for 2022 will be frozen for former executive directors pending further consideration. Meanwhile, the publication of the results of the HBOS fraud investigation led by former High Court Judge Linda Dobbs has once again been delayed, according to the report.
* U.K.-headquartered Standard Chartered PLC will fully exit its operations in Angola, Cameroon, Gambia, Jordan, Lebanon, Sierra Leone and Zimbabwe in a bid to refocus and simplify its presence in Africa and the Middle East region. The banking group said it also intends to exit its consumer, private and business banking businesses in Tanzania and Côte d'Ivoire to focus solely on its corporate, commercial and institutional banking business. The markets that will be exited generated about 1% of total group 2021 income and a similar proportion of pretax profit.
* Banca Monte dei Paschi di Siena SpA CEO Luigi Lovaglio will present by the end of June the Italian lender's new industrial plan, which will focus on strengthening digital bank Widiba, Il Sole 24 Ore wrote. The Italian government and the ECB will agree by the summer break on the size of the bank's capital increase, originally €2.5 billion but with rumors indicating it at between €3 billion and €3.5 billion, the newspaper wrote.
FINANCIAL SERVICES
* Commerzbank AG has applied for a cryptocurrency custody license in the first quarter with German financial market regulator BaFin, making it the first major bank in the country to move toward the asset class, Börsen-Zeitung noted.
POLICY AND REGULATION
* Turkey's central bank mandated local banks to convert 40% of foreign exchange earned by the services sector in a bid to boost the country's forex reserves, Bloomberg News reported. The central bank recently maintained the policy rate at 14% and increased the percentage for export earnings to 40% from 25%.
* German authorities have requested legal assistance from the Russian government to extradite former Wirecard AG COO Jan Marsalek, who is believed to be hiding in Moscow, Bild reported, adding that Marsalek would face a trial in Munich for alleged corporate fraud.
* Austria's financial market supervisory authority appointed a government commissioner for Sberbank Europe AG, the Vienna-based subsidiary of Russia's Sberbank, to determine whether it is feasible to continue the bank's business under the current sanctions regime, Börsen-Zeitung wrote. The move comes nearly seven weeks after the authority banned the Sberbank unit from continuing its business operations.
INDUSTRY NEWS
* The Bulgarian parliament failed to elect a new central bank governor as the lone candidate, Lyubomir Karimansky, was unsuccessful in securing the backing of three out of four ruling parties in the coalition, Reuters reported. Dimitar Radev, whose term officially ended in July 2022, will temporarily remain in office.
* 52 financial institutions from 12 countries have so far joined the System for Transfer of Financial Messages, the Russian equivalent of the Swift financial messaging system, news agency TASS reported, citing Russian central bank Governor Elvira Nabiullina. A number of Russian banks have been cut off from the Swift system as a result of international sanctions over Russia's invasion of Ukraine.
* Ukraine's government endorsed the central bank's proposal to nationalize 26 billion hryvnia worth of assets held by Russian banks' local units that were removed from the market following the launch of Moscow's invasion of Ukraine, Ekonomichna Pravda reported, citing Svetlana Rekrut, managing director of the Ukrainian Deposit Guarantee Fund. The planned nationalization will require the approval of the National Security and Defense Council and the Ukrainian president before it is implemented, the official told the newspaper.
Deza Mones, Arno Maierbrugger, Meike Wijers, Esben Svendsen, Beata Fojcik, Yael Schrage, Stéphanie Salti, Praxilla Trabattoni and Nelson Siqueira contributed to this report.
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