TOP NEWS IN EUROPEAN FINANCIALS
* Italy-based UniCredit SpA has been approached by potential buyers interested in its Russian subsidiary and is in preliminary discussions regarding the sale of the unit, Bloomberg News reported, citing people with knowledge of the matter. In addition to the sale, the Italian lender is also considering other options regarding its Russian unit. A spokesperson for UniCredit declined to comment, the news wire noted.
* German lender Commerzbank AG's first-quarter consolidated profit attributable to shareholders more than doubled to €298 million from €133 million a year earlier. Net interest income rose year over year to €1.40 billion from €1.25 billion, as did net commission income, to €972 million from €951 million. The bank's risk result increased to €464 million from the year-ago €149 million, primarily due to provisioning effects related to the Russia-Ukraine war. Commerzbank has reduced its net exposure to Russia by 36% since mid-February to less than €1.2 billion by April-end.
➤ Japanese green bond issuers to sit out market uncertainty as interest rates rise
Several Japanese companies put on hold plans to sell green bonds, citing market uncertainties due to inflation and geopolitical tensions.
➤ US bank M&A pace plunges as sellers seek higher prices
Only 10 U.S. bank deals were announced in April, down from 24 in April of 2021, as sellers' price expectations surge and the decline in U.S. bank stock prices makes it harder for buyers to meet those expectations.
READ MORE about the market reaction and industry impact of the evolving situation in Russia and Ukraine in our new Issue in Focus.
EARNINGS SPOTLIGHT
* KBC Group NV posted first-quarter net result attributable to equity holders of the parent of €458 million, down from €557 million a year ago. CEO Johan Thijs said the Belgium-based banking group has limited direct exposure to Ukraine, Belarus and Russia, mainly a commercial exposure of some €55 million. KBC set aside a €223 million provision for geopolitical and emerging risks in the quarter.
* Mediobanca Banca di Credito Finanziario SpA posted a group net profit of €190 million for its fiscal third quarter, up from the year-ago €193 million. For the nine months ended March 31, the Italian banking group's net profit rose on a yearly basis to €716 million from €604 million. The group said its loan book has no direct exposure to Russia, Ukraine or Belarus, and the few indirect exposures it has are largely toward counterparties of good credit standing.
* Italy-based Banca Carige SpA - Cassa di Risparmio di Genova e Imperia's first-quarter reclassified net loss attributable to the parent company narrowed year over year to €8.7 million from €39.7 million.
BANKING
* Lloyds Banking Group PLC is closing its commercial finance business in Asia, including an office in Singapore serving corporate and commodities clients, as part of the U.K.-based bank's plans to focus on its home market and the U.S., Bloomberg reported. A Lloyds spokesperson confirmed to Bloomberg that the move is part of the group's recently concluded strategic review.
* Russia's finance ministry wants to finalize the planned merger of state-controlled VTB Bank PJSC, PJSC Bank Otkritie Financial Corp. and Russian National Commercial Bank PJSC in the first half of 2023, Kommersant reported, citing sources close to the ministry and the banks. Under the ministry's plans, Otkritie will be absorbed by VTB Bank, and Russian National Commercial Bank will come under VTB's control but will continue to operate as a separate legal entity.
* ABN Amro Bank NV has completed its €500 million share buyback program initiated Feb. 9. The Dutch lender said a total of 42,478,085 ordinary shares and depository receipts were purchased, representing about 4.5% of issued shares, under the program.
* Italy-based illimity Bank SpA agreed to acquire Aurora Recovery Capital SpA — a local company specialized in managing unlikely-to-pay loans — for an enterprise value of €40 million, through incorporation of a new company. The transaction is expected to complete by the end of 2022.
* Mediobanca Banca di Credito Finanziario aims to increase the number of women in senior management positions to 30% in five years and at least 40% in 10 years in a bid to improve gender diversity as part of the Italian bank's wider goals on environmental, social and governance and its new business plan.
FINANCIAL SERVICES
* U.K.-based asset management firm Fasanara Capital Ltd. is raising a new venture capital fund worth roughly $350 million to invest in financial technology and cryptocurrency companies, Bloomberg News reported.
* Ludlow Wealth Management Group Ltd., a unit of U.K.-based specialist wealth and asset management business Mattioli Woods PLC, has acquired the trade and assets of Ferguson Financial Management Ltd. for an initial consideration of £600,000 and potential further consideration of up to £600,000, dependent on the attainment of specified performance targets in the year after completion.
POLICY AND REGULATION
* Poland's Office of Competition and Consumer Protection initiated explanatory proceedings to check the approach and practices applied by local banks in relation to early mortgage loan repayments made by clients. The competition watchdog will probe 17 banks during the explanatory proceedings.
* Aleš Michl was appointed new governor of the Czech central bank, effective July 1. Michl said he will propose during the first central bank board meeting to be held after he takes over as the new governor to keep interest rates stable for a while in order to assess the impact of the central bank's monetary policy to date. The key rate in the Czech Republic currently stands at 5.75% after increasing by 550 basis points since June 2021, Reuters noted.
* The General Court of the EU Court of Justice confirmed a 2016 ECB decision that Fininvest SpA cannot own more than 9.9% in Banca Mediolanum SpA after the 2013 fraud conviction of Silvio Berlusconi, the former Italian prime minister who owns Fininvest, Il Messaggero reported. Fininvest said it will appeal the decision, according to the newspaper.
* North Macedonia's central bank raised its key policy rate by 0.25 percentage point to 1.75% amid accelerating inflation.
Sheryl Obejera, Arno Maierbrugger, Meike Wijers, Esben Svendsen, Beata Fojcik, Heather O'Brian, Stéphanie Salti, Sophie Davies and Mariana Aldano contributed to this report.
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