TOP NEWS IN EUROPEAN FINANCIALS
* HSBC Holdings PLC posted a first-quarter after-tax profit attributable to ordinary shareholders of the parent company of $2.80 billion, down from the year-ago $3.88 billion, mainly driven by a $642 million net charge for expected credit losses that reflect the economic impacts of the Russia-Ukraine war and inflationary pressures. Despite the profit decline, CEO Noel Quinn said higher lending and good business growth in other segments "bode well for future quarters." The U.K.-headquartered bank noted that further share buybacks this year would be unlikely at this stage.
* Banco Santander SA's first-quarter profit attributable to the parent climbed 58.1% year over year to €2.54 billion from €1.61 billion, with the Spanish group noting that its geographic and business diversification has, to some extent, shielded it from the adverse effect of Russia's invasion of Ukraine. The bank booked net loan loss provisions of €2.10 billion, up from the year-ago €1.99 billion. Santander said it "remains confident" that it can achieve its 2022 targets.
➤ European banks face tough choice as they weigh Russia pullback
Amid wide-ranging sanctions, banks must either embark on a swift and probably costly exit from Russia or stay put and deal with sanctions and reputational risk.
➤ French banks face up to mounting challenges as election shock is avoided
Relief at the reelection of Emmanuel Macron will be short-lived as France's largest lenders face up to the problems posed by the impact of the war in Ukraine on revenues and asset quality.
➤ Swiss, UK banks among least efficient in Europe in Q4'21
Swiss lender Credit Suisse Group had the highest cost-to-income ratio among Europe's biggest banks, S&P Global Market Intelligence data shows, while three of the five U.K. banks in the sample were in the top 10.
READ MORE about the market reaction and industry impact of the evolving situation in Russia and Ukraine in our new Issue in Focus.
BANKING
* Swiss bank UBS Group AG's first-quarter net profit attributable to shareholders rose 17% to $2.14 billion from the year-ago $1.82 billion. Pretax profit at the group's investment bank division more than doubled year over year to $929 million from $412 million. As of March 31, the group's direct exposure to Russia stood at roughly $400 million, adding that the group-wide profit-and-loss impact of its exposure to the country was roughly $100 million.
* Sydbank A/S saw its first-quarter profit jump year over year to 445 million Danish kroner from 291 million kroner. The bank now expects its 2022 profit to be between 1.35 billion kroner and 1.55 billion kroner, up from its previous guidance of between 1.15 billion kroner and 1.45 billion kroner.
* Barclays PLC booked around £500 million of emerging-markets trading revenues in the first quarter, according to Bloomberg News. The increase comes after volatile currency markets and movements in credit-defaults swaps in the quarter due to the market impact of the Russia-Ukraine war, sources told Bloomberg. The British bank will report its quarterly earnings this Thursday.
* Thirty-one investors with a combined AUM of more than $5 trillion are now planning to back a climate resolution that would have Credit Suisse Group AG cut its exposure to fossil fuel assets, Reuters reported. The new investors that have pre-declared their support include Legal & General Investment Management Ltd., Aviva Investors and Sparinvest, according to the report. The Swiss bank's annual general meeting is slated for April 29.
* Germany-based Deutsche Bank AG closed a €300 million share buyback program and proposed around €400 million in distributions as dividends of 20 cents per share in respect of 2021, taking total capital distribution to shareholders to approximately €700 million. CEO Christian Sewing said the move "marks a milestone on our strategic journey" following its yearslong restructuring.
* Russian private lender JSC Alfa-Bank gave its brokerage clients until midnight yesterday to move their foreign securities to another platform as it cannot do this on their behalf due to international sanctions, Reuters reported.
FINANCIAL SERVICES
* Deutsche Börse AG's first-quarter net profit attributable to shareholders climbed 33% year over year to €420.8 million from €317.3 million. Citing " developments in the financial markets" in the first three months, the German exchange operator now expects its full-year 2022 net revenues to exceed its previous forecast of around €3.8 billion.
* ICE Clear Europe Ltd., the U.K.-based clearing arm of Intercontinental Exchange Inc., booked a margin breach totaling $1.03 billion in the fourth quarter of 2021, Bloomberg reported, citing company disclosures. The breach highlighted the risks impacting commodity markets even before the Russia-Ukraine war, according to the report.
POLICY AND REGULATION
* The Kazakh central bank raised its key rate from 13.5% to 14%, saying it sees more room for further monetary policy tightening given the trajectory of inflation expectations and the risk of possible additional inflationary shocks.
* The Polish government proposed a financial assistance plan aimed at supporting borrowers holding loans denominated in Polish zlotys amid growing interest rates. The plan includes payment holidays for borrowers, an increase in contributions from local banks to an existing borrowers' support fund, and the creation of a new support fund of at least 3.5 billion zlotys that would be funded from banks' profits. The government also proposed to replace the Warsaw interbank offered rate with a different rate for calculating interest rates on mortgage loans from January 2023.
INDUSTRY NEWS
* Emmanuel Macron became the first French president to be reelected in 20 years, having won 58.5% of the vote in the country's latest elections, news outlets including CNN and BBC News reported.
Deza Mones, Daniel Stephens, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Heather O'Brian, Brian McCulloch, Praxilla Trabattoni and Mariana Aldano contributed to this report.
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