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In This List

Coronabond chorus; Helaba profit up; Swiss banks allowed to free up capital

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Coronabond chorus; Helaba profit up; Swiss banks allowed to free up capital

* The ECB, the European Banking Authority and the European Securities and Markets Authority are considering temporarily suspending a part of the IFRS 9 accounting standards that requires banks to set aside money for potential loan losses earlier than before, Bloomberg News reported. The option is among a number of measures being looked at by European authorities to provide banks relief amid the economic impact of the coronavirus pandemic. ESMA said yesterday that the IFRS 9 "includes sufficient flexibility to faithfully reflect the specific circumstances of the COVID-19 outbreak and the associated public policy measures," and that banks should distinguish between measures that have an impact on credit risk over the expected life of loans and those aimed at addressing borrowers' temporary liquidity constraints.

* ECB President Christine Lagarde has called for serious consideration of a one-off joint debt issue of coronabonds during a video conference with eurozone finance ministers, joining the chorus for such instruments, insiders told Reuters. France, Italy, Spain and six other countries support the issuance of coronabonds, the Financial Times reported.

* The European Banking Federation is trying to find common ground among European lenders on whether to scrap dividends to conserve capital as the coronavirus causes damage across the economy, Bloomberg cited Jean Pierre Mustier, president of the EBF and CEO of UniCredit SpA as saying adding that in a letter he asked banks for their view on the subject.

UK AND IRELAND

* Companies listed on the London Stock Exchange Group PLC will be allowed to delay the payment of dividends by up to 30 days due to the coronavirus pandemic. LSE will not permit a delay to pay dividends of more than 60 business days after the record date.

* U.K. authorities are discussing the impact the new coronavirus outbreak might have on plans to end the use of the London interbank offered rate, although the target transition deadline remains 2021-end.

* Barclays PLC will not charge interest on overdrafts from tomorrow until April-end to support customers amid the coronavirus crisis, the FT reported. Lloyds Banking Group PLC and HSBC Holdings PLCare also offering certain customers a £300 interest-free overdraft.

* The Irish central bank has approved the sale of Goodbody Stockbrokers to Bank of China Ltd., The Irish Times reported. The process is now expected to complete by early summer.

GERMANY, SWITZERLAND AND AUSTRIA

* Landesbank Hessen-Thüringen Girozentrale, or Helaba, beat its earlier forecast for its full-year 2019 results, with its pretax profit for the year rising 20.3% year over year. The German banking group's full-year 2019 consolidated pretax net profit was €533 million, compared with €443 million in 2018.

* The Association of German Banks said it was "positive" toward a suggestion for lenders to suspend their dividend payments this year in order to retain their lending capacity, Handelsblatt reported.

* Henning Bergmann, CEO and member of the board of directors of the German Derivatives Association, told Handelsblatt that he is witnessing extreme and unprecedented volatility in the trading of individual securities and indices owing to the coronavirus crisis, but he allayed fears that the situation would lead to a financial crash.

* Swiss financial market supervisory authority Finma will temporarily allow banks to calculate the leverage ratio without central bank reserves in light of the coronavirus outbreak. This measure frees up CHF20 billion of Tier 1 capital. The regulator has also asked the financial sector to carefully consider the level of upcoming dividend distributions.

* The Swiss central bank, in consultation with Finma, proposed the reduction of the countercyclical capital buffer for banks to zero percent, effective immediately, to support lending activities.

* Credit Suisse Group AG is giving up on its plans of a CHF1.5 billion share buyback program this year due to economic uncertainties caused by coronavirus, Bloomberg cited Chairman Urs Rohner as saying in a letter to shareholders. Meanwhile, CEO Thomas Gottstein said the bank does not want to generate profit from the Swiss government's coronavirus bridging loan program and would donate any profit to projects supporting Swiss companies that are facing liquidity difficulties.

FRANCE AND BENELUX

* French fund manager Exane AM announced yesterday the suspension of a fund following valuation problems, according to Les Echos. Exane Integrale, which has more than €120 million in assets under management, follows a strategy similar to hedge funds based on equity derivatives.

* The disposal of HSBC France could fail as a consequence of the coronavirus crisis, according to Les Echos. Before the crisis, potential buyers had already made it clear to the seller that they were considering paying a price close to zero or even negative.

SPAIN AND PORTUGAL

* CaixaBank SA has closed 569 branches due to coronavirus infections among staff and preventative measures taken by Spain to stem the outbreak of the virus. A total of 178 employees had tested positive for coronavirus, and 32% of the 569 branches had closed due to staff falling ill. The remaining 68% have closed due to Spain's lockdown.

* Bankinter SA will allow deferred capital payments on mortgages for those clients who do not qualify for the government-established debt moratorium, Europa Press reported.

* Banco de Portugal decided to facilitate the rules for customers in need of credit. The goal, according to a statement released by the central bank, is to provide families with liquidity in the very short term to mitigate the effects of the new coronavirus, Diário de Notícias reported. The regulator, amongst other measures, said customers will be exempted from the regular payment of interest rates, Jornal de Negócios added.

ITALY AND GREECE

* The Italian government could extend its golden share powers to the biomedical sector as well as the banking and insurance ones, after anomalous movements on the shares of some of these companies, in particular Generali, MF reported.

* Timone Fiduciaria, the company owned by the members of the shareholder pact of Azimut Holding SpA, reached an agreement on the terms and characteristics of a €30 million funding round that will be necessary to buy Azimut shares that will then be conferred to the pact, Il Sole 24 Ore reported.

NORDIC COUNTRIES

* Iceland's central bank lowered the banks' average reserve maintenance requirement to 0% from 1%, and kept the fixed reserve requirement unchanged at 1%, considering the coronavirus crisis.

* Norway's Financial Supervisory Authority proposed requiring the country's financial sector to refrain from paying dividends for 2019 until further notification, given the coronavirus crisis.

* Swedish regulator Finansinspektionen has postponed a decision on the possible imposition of multibillion kronor fines against Skandinaviska Enskilda Banken AB until June, wrote Svenska Dagbladet and Dagens Industri. The regulator cited a need to re-task personnel and re-prioritize resources in the face of a worsening COVID-19 pandemic as the underlying reason for its decision. The FSA had planned to release the conclusions of an investigation conducted by the financial watchdog into suspected money laundering at Swedbank in the Baltic states.

* Oma Säästöpankki has become the latest Finnish bank to suspend plans to issue a profit guidance for 2020, against the backdrop of the COVID-19 pandemic, wrote Kauppalehti.

EASTERN EUROPE

* Fitch Ratings revised the outlook on the banking sectors in Russia, Ukraine, Kazakhstan, Armenia, Azerbaijan, Belarus and Georgia to negative considering economic pressures on the countries from the spread of the coronavirus and the lower oil price.

* Albania's central bank cut its policy rate by 50 basis points to a record low of 0.5% from 1.0% to stave off the economic fallout from the coronavirus pandemic.

* PAO Sberbank of Russia has launched an assistance program, including loan repayment deferments, for companies from industries most affected by the spread of the coronavirus, news agency Prime reported.

* The Russian central bank expects to complete the sale of its 50% stake plus 1 share in PAO Sberbank of Russia to the government in early April, Interfax reported.

* PJSC Sovcombank increased its stake in Volga-Caspian Joint-Stock Bank JSC to 91%, having purchased the lender's shares from its key shareholders and management.

* Bank Pekao SA estimates that the recent decision of the Polish central bank to reduce interest rates will lower its 2020 net result by around 250 million zlotys, while its interest margin will drop by around 15 basis points. The lender also said it expects the financial situation of its clients will worsen due to the spread of the new coronavirus, which will negatively affect its 2020 financial results.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: AMP withdraws guidance citing uncertainty; China issues asset management rules

Middle East & Africa: Tadawul limits trading hours; debt relief for Somalia; Nigeria bucks rate trend

Latin America: LatAm equities see some recovery; Fitch downgrades Ecuador

North America: Washington CUs merging; Fed cuts back on bank exams; Citi, Wells close branches

Global Insurance: COVID-19 costs; Aon/Willis integration leaders; push for pandemic backstop

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

European bank authorities release rainy-day funds to aid lending amid COVID-19: Bank supervisors in nearly all European countries that have introduced countercyclical buffers have either slashed or frozen them in an effort to ease bank lending during the COVID-19 outbreak.

UAE banks unlikely to bolster property lending amid pandemic, falling oil prices: Measures aimed at expanding lending to the troubled property sector in the United Arab Emirates are unlikely to encourage banks to bolster real estate lending, particularly amid the coronavirus pandemic and falling oil prices, according to analysts.

Sheryl Obejera, Arno Maierbrugger, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Yael Schrage, Stephanie Salti, Praxilla Trabattoni and Mariana Aldano contributed to this report.

The Daily Dose has an editorial deadline of 7 a.m. London time. Some external links may require a subscription. Links are current as of publication time, and we are not responsible if those links are unavailable later.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.