TOP NEWS IN EUROPEAN FINANCIALS
* ING Groep NV aims to reach a 3% average annual total income growth and an annual average fee income growth of between 5% and 10% as part of its financial targets for 2022 to 2025. The Dutch lender is also looking at achieving a cost income ratio of between 50% and 52%, a common equity Tier 1 ratio of about 12.5%, and a return on equity of 12% for 2025. Additionally, ING said it commits to mobilize €125 billion of sustainable finance per year by 2025.
* A U.S. district judge said shareholders can sue Deutsche Bank AG in their proposed class action for allegedly hiding shortcomings in its internal controls while doing business with risky clients such as the late disgraced financier Jeffrey Epstein and Russian oligarchs, Reuters reported. The judge said shareholders may also pursue claims against the Germany-based bank's former CEO, John Cryan, and current CEO Christian Sewing. A spokesperson for the bank declined the news wire's request for comment.
➤ UK banks face mortgage arrears risk as rising inflation squeezes borrowers
Interest rates have risen swiftly in the wake of soaring inflation, and lenders are expected to see a sharp rise in mortgage arrears and possessions as a result.
➤ BNY Mellon's debt management unit sale tops European financials M&A deals in May
M&A deals in European financials could see a slight boost from big banks looking to sell their activities in Russia in a bid to limit the potential fallout from the war in Ukraine.
READ MORE about the market reaction and industry impact of the evolving situation in Russia and Ukraine in our new Issue in Focus.
BANKING
* Lloyds Banking Group PLC will offer £3 million in compensation to each victim of a fraud involving the Reading, U.K., branch of its HBOS PLC unit, according to Sky News. The offer was proposed in exchange for the settlement of claims. The compensation will cost the U.K. bank around £600 million, a source told Bloomberg News. In an emailed statement, Lloyds told Bloomberg that it will continue to give "fair and generous" compensation to those impacted.
* U.S. investment banks JPMorgan Chase & Co. and The Goldman Sachs Group Inc. have halted trading operations with Russian debt following recent guidance from U.S. authorities that prohibited U.S. investors from purchasing both new and existing debt and equity securities issued by Russian entities, Bloomberg reported.
* Germany's Oldenburgische Landesbank AG, together with Dutch insurance company ASR Nederland NV, is acquiring a leveraged loan portfolio worth roughly €500 million from Dutch lender NIBC Bank NV consisting of private equity debt of medium-sized companies mainly based in Germany and the Netherlands.
* Peter Weinzierl, former CEO of Meinl Bank AG — now Anglo Austrian AAB Bank AG — is fighting extradition to the U.S. after his arrest in the U.K., Bloomberg reported. His lawyer claimed in a London court that the U.S. "lured" the Austrian banker to fly to the U.K. under the guise of a lunch with an intelligence agent pretending to be a business associate. Weinzierl is facing charges over his alleged involvement in a bribery and money laundering scheme involving Brazilian construction company Odebrecht SA.
* Graubündner Kantonalbank, or GKB, acquired a 70% stake in Swiss banking peer BZ Bank AG, finews.com and Bloomberg News reported, citing a statement from GKB. The price of the deal was not disclosed, but GKB will use its funds to finance the transaction.
* U.S.-based investment company Dimensional Holdings Inc. has raised its ownership in Sydbank A/S to above 5% of the Danish bank's capital, FinansWatch reported.
FINANCIAL SERVICES
* Together Financial Services Ltd. received bids from two vying consortia, according to Sky News. A consortium consisting of Bain Capital LP and J.C. Flowers & Co. LLC is competing against another comprising Centerbridge Partners and Bayview Asset Management for a stake of up to 40% in the U.K.-based mortgage lender, which would likely value the whole company at £1.7 billion. Both parties are expected to submit final offers in July.
* Starling Bank Ltd. agreed to acquire a £500 million mortgage loan book from Masthaven in a bid to diversify lending away from state-backed COVID-19 loans, sources told the Financial Times. The U.K.-based digital bank has been bidding for other loans books, including Kensington's mortgage book that is worth £1 billion.
* Swiss asset management firm Bellevue Group AG issued a profit warning for the first half 2022, saying that the expected profit for the period will be 35% to 40% lower than the CHF22.5 million achieved in the same period last year.
* Netherlands-based Euronext NV agreed to acquire the technology businesses of Italy-based Nexi SpA's for around €57 million. The transaction is expected to close in the second half of 2022.
* Zopa Bank Ltd. may be delaying its initial public offering amid uncertainty brought by the Russia-Ukraine war, CEO Jaidev Janardana told CNBC. The U.K.-based digital lender originally planned the IPO by 2022-end. Janardana said they have to wait until the markets are in the right place.
* Switzerland-headquartered cryptocurrency lending platform Nexo AG has proposed to buy out certain assets, mainly collateralized loan receivables, from beleaguered Celsius Network LLC after the latter said it was freezing withdrawals and transfers because of "extreme conditions" in the cryptocurrency market.
POLICY AND REGULATION
* The Bank of England's Prudential Regulation Authority is removing a temporary buffer adjustment it imposed to aid U.K. firms during the COVID-19 pandemic due to the uncertainty linked to the outbreak now receding. The adjustment will be removed, effective from December-end.
* The EU markets regulator said there is a need to improve fee collection for investment funds in the block as there are concerns over some asset managers' compliance with delegation rules. A research from the European Securities and Markets Authority found that most EU fund managers return only 50% to 65% of the gross revenues to the fund and its investors.
* Stress tests carried out recently by the Polish central bank have shown that banks operating in the country have sufficient capital to absorb potential losses arising from both reference and shock scenarios analyzed during the tests, the central bank said in its latest Financial Stability Report. There are some financial institutions that operate with low capital ratios, but their potential collapse in an extreme scenario would not pose a threat to the stability of other entities and of the financial system as a whole, the central bank said.
Sheryl Obejera, Arno Maierbrugger, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Yael Schrage, Stéphanie Salti, Praxilla Trabattoni, and Nelson Siqueira contributed to this report.
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