TOP NEWS IN EUROPEAN FINANCIALS
* Swiss bank Credit Suisse Group AG said it expects to post a net loss for the fourth quarter of 2020, citing higher-than-expected provisions related to residential mortgage-backed securities cases in the U.S. that could lead to a fine of up to $680 million for the company. The lender said it expects to set aside $850 million to cover the potential settlement, more than twice the $300 million it had previously provisioned.
* Denmark's state prosecutor SØIK has dropped charges against six former Danske Bank A/S executives as part of a criminal investigation into a money-laundering scandal at the bank's Baltic branch, according to the country's national broadcaster DR. Meanwhile, Danish newspaper Berlingske reported that the bank's former CEO Thomas Borgen, as well as Lars Mørch and Henrik Ramlau-Hansen, both former members of Danske's executive board, are still charged as part of the case, citing anonymous sources.
➤ Libor's end in sight but swaps market lags and litigation looms
With a year to go before Libor publication is set to cease, not every one is ready for the end and some fear legal challenges may occur.
➤ 2020 record year for global i-bank fees – Refinitiv
Global investment banking fees hit a record high in 2020 amid a market rally induced by the coronavirus crisis, according to data company Refinitiv US Holdings Inc.'s annual review of the business.
➤ Bank of France says 'slow' recovery could depress bank earnings
A protracted economic recovery from the coronavirus crisis could result in higher corporate losses and thus depress bank earnings due to a rise loan loss provisions.
BANKING
* Italian state-controlled bad loan management group Amco could acquire some €20 billion in nonperforming loans and unlikely-to-pay loans from UniCredit SpA to make a takeover of Banca Monte dei Paschi di Siena SpA more appealing, Il Messaggero said, noting that the figure is up from the €14 billion in NPLs alone that has been discussed previously.
* Some Italian banks are studying the possibility of setting up a private bad bank that could manage loans that became impaired during the COVID-19 pandemic, MF said. The newspaper did not name the banks that are considering this option.
* Italy's Banca Carige SpA intends to relist its shares on the Milan stock exchange in the first half of 2021 or by autumn 2021 at the latest after trading in the stock was suspended in December 2019, MF said.
* French bank BNP Paribas SA's Polish unit, BNP Paribas Bank Polska SA, increased its existing provision against its foreign currency mortgage portfolio by 101.7 million zlotys to 200.3 million zlotys, with the higher amount to be reflected in the lender's financial report for the last quarter of 2020.
* Portugal-based Caixa Geral de Depósitos SA will have to wait a few months to get the final approval from the European Commission on its restructuring process, Jornal de Negócos reported.
* Santander UK has hired Tracie Pearce to run its mortgage business in Europe, Expansión reported. She is currently director of retail banking at HSBC UK, with responsibility for its mortgage business, along with all personal banking products.
* In a recent report on European banking, Credit Suisse forecast that there will be more M&A transactions in Spain's banking sector in the coming year, Europa Press wrote.
FINANCIAL SERVICES
* Natural catastrophes caused overall losses of $210 billion in 2020, up significantly from the 2019 figure of $166 billion, according to a report by Munich Re. In Europe, the natural disaster figures for 2020 were "relatively benign," with overall losses and insured losses at $12 billion and $3.6 billion, respectively.
* U.K.-based Allianz Insurance PLC completed the sale of British Reserve Insurance Co. Ltd. to European property and casualty runoff group Marco Capital Holdings Ltd.
* Atradius Credit Insurance NV appointed Christophe Cherry new France CEO, replacing Yves Poinsot, L'Echo reported. Cherry will continue to be CEO of Atradius Benelux, a position has been holding since 2009.
* German banking software provider Mambu GmbH raised €110 million in its latest funding round led by U.S. private equity firm TCMI Inc., with the fundraising bringing the company's valuation to more than €1.7 billion.
POLICY AND REGULATION
* France's financial system is facing a systemic risk from mounting company debt and possible further coronavirus lockdowns, Bloomberg News wrote, citing a report by the Bank of France. The central bank also warned that a significant increase in defaults by nonfinancial firms in the event of a slow economic recovery will impact banks' results, particularly through increased losses and provisions linked to companies' credit risk.
* The U.K. Financial Conduct Authority identified 4,000 financial services firms at a heightened risk of failure because of the market downturn driven by the coronavirus crisis, as of the end of October 2020.
* The U.K.'s tax authority fined local money transfer firm MT Global Ltd. a record £23.8 million for violating anti-money laundering rules, saying the company committed significant breaches of regulations on risk assessments and associated record-keeping, among other things.
* Andrew Hauser, the Bank of England's executive director for markets, said central banks require new tools to deal with nonbanks at the center of the market upheaval caused by the coronavirus pandemic, Reuters reported. Hauser also said central banks should consider trading securities during periods of financial panic as market makers of last resort, in exchange for tougher rules on nonbanks.
* Norway's financial regulator, Finanstilsynet, has criticized DNB ASA over compliance failures related to unit DNB Markets AS' facilitator role in a stock exchange listing in 2018, e24.no reported. A review by the regulator found that DNB Markets, in connection with the listing, initiated trading for some customers solely for the purpose of obtaining a sufficient number of shareholders to satisfy the listing requirements on the Oslo Stock Exchange.
* The public prosecutor in Frankfurt, Germany, applied for and obtained an international arrest warrant for Paul Mora, a former banker at the London branch of UniCredit Bank AG, formerly HypoVereinsbank, for his alleged involvement in the cum-ex dividend scandal, Handelsblatt wrote.
* Danish prosecutors charged two British citizens, including the founder of U.K. hedge fund Solo Capital, Sanjay Shah, as part of a 9.6 billion kroner tax fraud investigation into so-called cum-ex trades, an insider told Bloomberg News. The second individual, who has not been named, is reportedly seen as the principal helper of Shah, who the Danish tax authority said was the mastermind of cum-ex fraud.
* Reforms to France's natural catastrophe insurance regime are likely with the government backing proposals that will extend the time to declare a loss from 10 days to 30 days, have insurers pay the cost of rehousing, and ban a system of franchises, which means some people are effectively not covered, Les Echos reported.
* Poland's finance ministry put up for public consultations a mortgage bond bill that is expected to bolster the competitiveness and attractiveness of this market segment in Poland and increase the popularity of these instruments among investors, news agency PAP said.
MARKETS
Click here for a summary of indexes on the MI platform.
Sheryl Obejera, Arno Maierbrugger, Danielle Rossingh, Gerard O'Dwyer, Beata Fojcik, Heather O'Brian, Brian McCulloch, Sophie Davies and Mariana Aldano contributed to this report.
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