TOP NEWS IN GLOBAL FINANCIALS
* Credit Suisse Group AG expects to post a loss in the second quarter, it said in a trading statement. Geopolitical tensions leading to heightened market volatility, rising interest rates, weak customer flows and client deleveraging particularly in Asia-Pacific "have depressed the financial performance" of the Switzerland-based group's investment banking division and its overall performance, it said. The past two quarters have been unprofitable for Credit Suisse, The Wall Street Journal noted. The bank also plans to accelerate its cost initiatives to maximize savings from 2023 and beyond. Credit Suisse is set to release its second-quarter results July 27.
* Citigroup Inc. Asia-Pacific CEO Peter Babej said the lender plans to hire about 3,000 new staff for its Asia institutional business in the coming years, Reuters reported, citing the executive. Babej said the bank's Hong Kong and Singapore hubs would be a key focus of the additional head count.
➤ Credit Suisse risks losing business amid overhaul – analysts
Recent revenue weakness has raised market concerns about potential loss of business in the bank's core investment bank and wealth management divisions.
➤ Bill would help credit unions to expand services in underserved areas
The bank lobby is pushing back against a bill that would allow credit unions to expand their membership and lift business lending caps in underserved areas.
➤ Indonesian banks may tap foreign investors for fresh capital as new rule looms
Commercial banks will lose the license to provide current account services, foreign exchange activities and insurance if they do not have at least 3 trillion rupiah of Tier 1 capital by the end of 2022.
READ MORE about the market reaction and industry impact of the evolving situation in Russia and Ukraine in our new Issue in Focus.
US & CANADA
* The U.S. House Financial Services Committee is requesting information from the top 10 U.S. banks, top five U.S. property and casualty insurance companies and top five U.S. life insurance companies on any research and disclosures they have conducted about their or their predecessor institutions' involvement in the financing of chattel slavery in the U.S. The lawmakers, led by Committee Chair Rep. Maxine Waters, D.-Calif., said some disclosures made by financial institutions in compliance with state and local laws in recent years showed "clear" historical connections to slavery in the form of, among others, lending capital for the purchase of slaves, accepting enslaved people as collateral for loans and taking ownership of enslaved people in events of default.
* With the community bank leverage ratio framework threshold raised in the first quarter, the number of U.S. community banks eligible for a simpler regulatory capital reporting methodology declined sequentially. In the first quarter, 1,710 banks with less than $10 billion in total assets qualified for and opted into the community bank leverage ratio, or CBLR, framework, down from 1,757 in the fourth quarter of 2021, according to S&P Global Market Intelligence data.
Click here for more of the day's essential bank and financial services news in the U.S. and Canada.
LATIN AMERICA
* Mexican commercial banks had a total delinquency rate of 2.4% for April, down from 2.45% in March, and down from 2.54% a year ago, El Financiero reported, citing data from banking regulator CNBV. Consumer loans, in particular, saw the delinquency drop to 2.88% from 4.48% last year.
* There were 148 M&A deals in Mexico for the year so far through May, worth about $5.90 billion, La Nación reported, citing a report from Transactional Track Record. There were 22 M&A transactions worth $408 million in May alone.
* Ecuador-based payment platform KUSHKI SA has secured $100 million as additional funds in a series B fundraising, La República reported. The new money is an extension to the old series fundraising.
EUROPE
* Deutsche Bank AG will establish a new technology center in Berlin, supporting the Germany-based lender's investment and corporate banks. Gerrit Einhoff, chief information officer for the corporate bank and investment bank in Germany, will lead the center, the lender said. The announcement comes as the Financial Times (London) and other news outlets reported that Deutsche Bank had moved hundreds of tech specialists, along with their families, to the German capital from Russia in a bid to limit the impact of the Russia-Ukraine war.
* Italy's UniCredit SpA received four binding offers for its leasing business by a June 6 deadline, with offers made by Bain, CRC, BPCE and HPS Investment Partners, MF wrote. CEO Andrea Orcel and his collaborators will decide in the coming weeks whether to begin exclusive negotiations with one of the four bidders, according to the newspaper.
* DWS Group GmbH & Co. KGaA will maintain its current strategy despite the resignation of CEO Asoka Wöhrmann, Chairman Karl von Rohr said at the German asset manager's annual general meeting. DWS' supervisory board and parent Deutsche Bank "stand firmly behind the strategy … without any ifs or buts," von Rohr said in a prepared speech. Von Rohr added that the focus on environmental, social and governance topics will be maintained. Wöhrmann left DWS at the end of the meeting and was replaced by Stefan Hoops amid allegations of greenwashing.
Click here for more of the day's essential financial news in Europe.
MIDDLE EAST & AFRICA
* Kenya-headquartered Centum Investment Co. Ltd. agreed to sell its 83.4% stake in Sidian Bank Ltd. to Access Holdings PLC subsidiary Access Bank PLC for 4.3 billion Kenyan shillings. Sidian Bank is expected to be merged with the Nigeria-based lender's Access Bank (Kenya) PLC unit.
* The International Monetary Fund and Sierra Leone reached a staff-level agreement on the fifth review of the economic program under the extended credit facility arrangement for the African country. Completion of the review by the IMF's executive board would make roughly $20.8 million available to Sierra Leone, bringing total disbursements under the arrangement to about $125 million.
ASIA-PACIFIC
* The Reserve Bank of Australia has increased the cash rate target by 50 basis points to 85 bps and the interest rate on exchange settlement balances by 50 bps to 75 bps. The central bank noted the rate increase as a further step in the withdrawal of monetary support put in place to help the Australian economy during the COVID-19 pandemic.
* BOC Hong Kong (Holdings) Ltd., HSBC Holdings PLC, Standard Chartered PLC, Citigroup Inc. and Crédit Agricole Corporate & Investment Bank joined as cornerstone members of the Alliance for Green Commercial Banks, an initiative by the Hong Kong Monetary Authority and International Finance Corp. to bring together global institutions to address climate risks.
* Agricultural Bank of China Ltd. said in a bourse release that it received approval from the China Banking and Insurance Regulatory Commission to issue up to 200 billion yuan of Tier 2 capital bonds in the domestic and overseas markets.
Click here for more of the day's essential financial news in Asia-Pacific.
Ryan Jeffrey Sy contributed to this report.
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