TOP NEWS IN EUROPEAN FINANCIALS
* Banco Santander SA said it is on track to reach its 2022 financial targets, including an underlying return on tangible equity above 13%, as it expects to maintain high profitability in the Americas and sees improved profitability in Europe. While the Russia-Ukraine war could impact activity and credit quality, potential interest rate hikes and operational improvements could help the Spanish bank deliver better profitability in Europe, CEO José Antonio Álvarez said. Meanwhile, Chair Ana Botín said the bank has already seen some indirect impacts of the war, including higher inflation and lower economic growth, as well as those that go beyond the rise in energy prices, although it has a negligible direct credit exposure to both countries of just €80 million. Botín also urged the European Union to define as soon as possible what kind of lending is deemed consistent with a net-zero energy policy to help reduce the bloc's dependence on Russian oil and gas, among other initiatives.
* Sanctions-hit Sberbank of Russia said it is winding down operations at its London investment arm, Sberbank CIB (UK) Ltd., Reuters reported. The U.K. Financial Conduct Authority said the unit will enter special administration as sanctions has rendered it "operationally unable to make payments" despite having sufficient assets to cover its liabilities.
➤ Indirect effects from Ukraine war most concerning for eurozone banks – EBA
Among banks in the eurozone, those in in France, Austria and Italy are most exposed to Russia, according to the European Banking Authority's latest quarterly risk dashboard.
READ MORE about the market reaction and industry impact of the evolving situation in Russia and Ukraine in our new Issue in Focus.
BANKING
* Credit Suisse Group AG said it has taken steps, including separating its asset management operations from the rest of the group, to prevent losses similar to those it incurred from the collapse of British specialty lender Greensill, Reuters reported, citing a response by the Zurich-based bank to questions from shareholder group Ethos ahead of its April 29 annual general meeting. Credit Suisse, which is still trying to recoup investor funds tied to Greensill, said it expects its efforts to necessitate litigation against individual debtors and insurance companies, which could take around five years.
* A number of top Barclays PLC shareholders are pushing for the British bank to claw back or cancel part of the bonuses for outgoing CFO Tushar Morzaria to demonstrate accountability following a U.S. trading blunder that will cost the bank £450 million, sources told Sky News. Barclays declined to comment to Sky News.
* The boards of Norwegian lenders Hemne Sparebank and ÅFjord Sparebank have approved a merger of the two banks, FinansWatch reported. The merged bank will operate under a new brand as Trøndelag Sparebank. The banks said the merger will ensure a solid bank, attractive jobs and more resources for customer service.
* Denmark-based Sydbank A/S is launching a new wealth management unit, Børsen reported. The new unit, which will focus on investment, markets, asset management and private banking, will be led by Jacques Skovgaard, who comes from the position as director of wealth management at Alm. Brand Bank A/S.
POLICY AND REGULATION
* Germany's Bundesbank and financial supervisory authority BaFin are examining the resilience of around 1,300 small and medium-sized banks in a stress test that had already been postponed from last year because of the pandemic, Handelsblatt reported. The banks are requested to submit the data collected in the stress test by the end of May. The results will also be used to determine the banks' individual capital requirements.
* The U.K. Financial Conduct Authority is facing calls to take advantage of Brexit to revamp credit cards and loans rules to ensure that more borrowers are offered the advertised rate of interest amid record-level borrowing, the Financial Times reported. Martin Lewis, founder of consumer advice site MoneySavingExpert, launched a campaign backed by U.K. Chancellor Rishi Sunak urging the FCA to return to the former system where 66% of borrowers had to be given the advertised rate known as the "typical" APR, or annual percentage rate. Following an EU directive, the U.K. has used representative APRs since 2011, under which only 51% or more of borrowers must receive the advertised rate.
* The European Union is looking at possibly shortening the two-year time frame to implement the proposed Markets in Cryptoassets regulation, or MiCA, amid concerns that digital tokens could be used to evade sanctions on Russia, sources told Bloomberg News. Countries including Ireland, Spain, Poland and Luxembourg were reportedly open to the idea. However, one outstanding issue that could prolong the talks is climate-related provisions, while another is the supervisory architecture, the report noted.
INDUSTRY NEWS
* The European Union plans to impose new punitive measures against Russia after Ukraine made allegations that Russia committed "war crimes" in the outskirts of Kyiv, news outlets including Politico and Reuters reported. Russia denied the allegations, Reuters wrote. European Council President Charles Michel said on Twitter that further EU sanctions are on their way, while German Finance Minister Christian Lindner confirmed that talks to prepare the next round of sanctions will start today, Politico noted. British Prime Minister Boris Johnson said the U.K. will also step up sanctions on Russia and boost military support to Ukraine in response.
* Ukrainian central bank Governor Kyrylo Shevchenko asked the European Commission and central banks of Japan, the U.K., the U.S. and the EU to ban domestic financial institutions from processing payments in Russian and Belarusian rubles. The governor said the ban would derail Russia's plan to switch to payments in the domestic currency amid sanctions imposed on the country due to the conflict in Ukraine.
Sheryl Obejera, Daniel Stephens, Meike Wijers, Esben Svendsen, Beata Fojcik, Yael Schrage, Brian McCulloch, Sophie Davies and Nelson Siqueira contributed to this report.
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