TOP NEWS IN EUROPEAN FINANCIALS
* The U.K. Payment Systems Regulator, or PSR, will initiate a two-part review of card fees amid a rise in costs post-Brexit, focusing principally on payment giants Mastercard Inc. and Visa Inc., which process 99% of debit and credit card transactions in the country. The probe will look at scheme and processing fees and cross-border interchange fees. Mastercard said it will review the terms of the investigation in detail and was committed to working with the PSR, while Visa said it looked forward to continuing a constructive dialog with the regulator.
* Crédit Agricole SA is aiming for a net income of more than €6 billion and a return on tangible equity of more than 12% by 2025 under its new medium-term strategy. The French bank also aims to attract 1 million additional retail banking customers over the period, relying on its expanded presence in Italy, Poland, Egypt and Ukraine. Additionally, Crédit Agricole expects to spend up to €20 billion on IT and digital investments throughout the strategy's course. The group's asset management arm, Amundi, also outlined its 2025 goals, including a payout ratio of at least 65% and a cost-to-income ratio of 53% or below.
➤ Santander's new CEO could increase focus on corporate and investment bank
The appointment of Héctor Grisi, a previous head of investment banking for Mexico, Central America and the Caribbean at Credit Suisse, follows Santander's abandoned attempt to appoint another investment banker, Andrea Orcel.
➤ Big German banks expect 2022 earnings boost from ECB interest rate hikes
The end of the ECB's negative rate policy will be good for business, with a host of German banks expecting a revenue boost.
➤ Climate stress test exposes vulnerability of UK banks' mortgage books
Seven lenders projected an increase of between 40% and 170% in aggregate mortgage losses under the Bank of England's climate stress test.
READ MORE about the market reaction and industry impact of the evolving situation in Russia and Ukraine in our new Issue in Focus.
BANKING
* The U.K. government extended a trading plan to sell part of its shareholding in NatWest Group PLC for another 12 months to Aug. 11, 2023, and said it still intends to return the bank to full private ownership by 2025-2026. The Treasury currently owns 5.09 billion shares in NatWest, or 48.5% of the bank's voting rights, Dow Jones Newswires noted.
* Banco de Sabadell SA may set out new financial targets in early 2023 to take into account rising interest rates, Reuters reported, citing CEO César González-Bueno. In the first quarter, the Spanish lender surpassed its more than 6% return on tangible equity target a year earlier than planned, according to the report. Meanwhile, González-Bueno reiterated that Sabadell was not planning to sell its British unit, TSB Banking Group PLC.
* Bank of Ireland Group PLC will likely appoint Gavin Kelly to succeed CEO Francesca McDonagh in September, according to The Irish Times. Kelly heads the Irish bank's domestic retail business. The search for McDonagh's replacement is still ongoing, a spokesperson told the newspaper, adding that it was likely that a strategy refresh will be spearheaded by the new chief.
* The economic and financial crisis caused by Russia's invasion will have significant consequences for the Ukrainian financial sector, but local banks are resisting the wartime challenges, the Ukrainian central bank said in its Financial Stability Report. The regulator estimates that lenders will lose at least 20% of their loan portfolios due to the ongoing crisis, but they will be able to use their capital to cover these losses.
* Italy's UniCredit SpA plans to hire 50 bankers over the course of the summer to bolster its wealth management business, according to MF.
* DBRS Morningstar upgraded the long-term issuer rating of Abanca Corporación Bancaria SA to BBB (high) with a stable trend, reflecting the Spanish bank's leading regional franchise and expansion of its foothold in its home market and in Portugal through recent acquisitions.
* Moody's raised the long-term deposit ratings of Portugal-based Novo Banco SA to Ba3 from B2 with a positive outlook, reflecting its improved credit profile amid a restructuring and the continued de-risking of its balance sheet.
FINANCIAL SERVICES
* Shares in Morses Club PLC crashed yesterday after the U.K.-based non-standard credit service provider warned that its trading performance in the first half of the year ending Feb. 25, 2023, could be severely hit by costs related to a spike in complaints in its home collected credit division. The company's shares were down more than 19% at yesterday's closing, according to S&P CapIQ Pro data.
* WorldRemit Ltd. CEO Breon Corcoran stepped down from the U.K.-based payments group, according to Sky News. The shrinking chance of the company going public was reportedly a factor in Corcoran's departure. Zepz, the new name of WorldRemit's parent, declined to comment to Sky News.
POLICY AND REGULATION
* Romania's finance ministry published a draft bill introducing a nine-month bank loan moratorium for retail and corporate borrowers faced with lower revenues as the result of the current economic situation, Romania Insider reported.
* The EU and member-states signed a provisional agreement on new compulsory reporting standards for big companies on the way they operate and manage social and environmental risks. The so-called Corporate Sustainability Reporting Directive "aims to end greenwashing," the European Parliament said. The new rules will apply from 2024 to companies with over 250 employees and turnover of more than €40 million, as well as non-EU companies with significant operations in the bloc. Smaller companies can opt out of the new system until 2028.
INDUSTRY NEWS
* The Association of Banks of Russia asked the country's central bank to develop mechanisms that would allow banks to recover funds frozen in Russia's National Settlement Depository as a result of Western sanctions, RBC reported. About €4.5 billion to €7 billion worth of Russian investors' and banks' funds are estimated to have been frozen as the result of sanctions imposed on the depository. A representative for the National Settlement Depository told RBC that it is in dialogue with the regulator and clients, discussing possible options to resolve the situation.
* U.K. state-owned British Business Bank is preparing to use its funds to help local tech companies amid a decline in their valuations, the Financial Times reported. Investment in tech companies grew to £8.2 billion in 2021 from £4.1 billion the previous year, according to the bank's recent report. However, acting CEO Catherine Lewis La Torre told company founders that "valuations are coming off," the FT wrote.
Deza Mones, Daniel Stephens, Meike Wijers, Esben Svendsen, Beata Fojcik, Heather O'Brian, Brian McCulloch, Praxilla Trabattoni and Mariana Aldano contributed to this report.
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