Citi rates Europe's banksat 'overweight': Analysts at Citigroup upgraded their recommendationon Europe's embattled banking sector to "overweight" from"neutral," suggesting that buying European banks would be "theworld's most contrarian trade," CityA.M. writes.
* ECB chief economist Peter Praet said the central bank remainscommitted to upholding its ultra-easy monetary policy "to secure a returnof inflation to levels below, but close to, 2% over the medium term."
* ECB supervisory board member Ignazio Angelonisaid banks under the ECB's supervision are expected to meet the central bank'scapital requirements in addition to meeting their compulsory capitalrequirements, noting also that an overall softening of capital requirements isnot warranted at this time, Reuters reports.
UK AND IRELAND
Merkel takes toughstance on May plans:German Chancellor Angela Merkel said unless the U.K. fully accepts the fourbasic EU principles of freedom of goods, services, capital and people, it willnot be granted full access to the bloc's single market, The Wall StreetJournal reports. Her comments follow U.K.Prime Minister Theresa May's statements that she would prioritize immigrationcontrols in Brexit negotiations.
* Meanwhile, IMF chief Christine Lagarde defended the fund's stark warnings about the potentialimpact of the Brexit vote a week before the referendum, saying it was the IMF'sjob to call attention to risks to the economy, The Daily Telegraph notes.
* U.K. Chancellor Philip Hammond dismissedspeculation that the government will pursue a "hard Brexit" in itsnegotiations with the EU, Bloomberg News reports.
* Separately, Hammond said he would welcome it ifMark Carney decides to extend his term as Bank of England governor for anotherthree years, Sky News writes. Carney initially agreedto serve a five-year term, which began in 2013.
* thismorning confirmed that its offer for SVG Capital plc is being extended and will remain open for acceptance until Oct. 13, andurged shareholders to accept the offer "without delay." SVG Capitalhas deemed the offer too low.
* Barclays Plc agreed to sell its U.K. trust business to ZEDRA — an independentspecialist in trust, corporate and fund services.
* isconsidering taking on MBNALtd.'s liabilities related to payment protection insurancemisselling in a bid to beat rival bidders, insiders tellBloomberg News. Barclays, however, has lost interest in the unit overantitrust concerns considering its Barclaycard division.
GERMANY, SWITZERLANDAND AUSTRIA
Commerzbank to losei-bank: CommerzbankAG is planning to bundle and spin off its investment bankingbusinesses, including exchange traded funds, certificates and other structuredfinancial products, as it faces rising costs due to tougher regulations, Frankfurter Allgemeine Zeitung.CEO Martin Zielke said the bank would first create an independent unit thatwould then be sold or floated in the medium term. The move would free up €500million in net capital tied to its investment banking operations and reducebalance sheet risks by €6 billion. Stricter regulations would increase theserisks to €8 billion in the coming years.
* is holdinginformal discussions with senior advisers at Wall Street banks to explore itsoptions, including a stock sale to raise about €5 billion and asset disposals,insiders tellBloomberg News. A decision to sell the shares will largely depend on the sizeof the U.S. Department of Justice's fine on a probe linked to RMBS, which wasoriginally mooted at $14 billion.
*Deutsche Bank is preparing to float a minority stake of its assetmanagement unit, insiders tellthe Financial Times. No decision hasbeen taken yet and any such move is unlikely to take place before the firsthalf of next year.
* Handelsblatt reportsthat the CEOs of several Germanblue-chip companies are prepared to offer Deutsche Bank a capital boost in thesingle-digit-billion-euro range if necessary. Under an emergency plan, thecompanies will purchase the bank's stocks to help shore up its reserves.
* Meanwhile,Deutsche Bank announced plansto cut another 1,000jobs in Germany in addition to the 3,000 layoffs already agreed inthe first round of negotiations with employee representatives in June.
* Nearly 1,000 employees at volunteeredfor a redundancy plan, Reuters says.The UniCredit SpAunit will decide on the final number of job cuts at the end of the month.
* SparkasseHannover plans to cut 200 jobs by 2019, Handelsblatt.The bank also plans to reduce the number of branches in the greater Hannoverarea by 20 to 99.
* UBS GroupAG isan online asset management service starting at €100,000 for private customersin Germany. Finews.ch has a .
FRANCE AND BENELUX
Delta Lloyd turns NNdown: thismorning turned down an unsolicited takeover bid by NN GroupNV. The latter has offered €5.30 in cash per ordinaryDelta Lloyd share, and said it plans to suspend the remaining outstanding partof its €500 million share buyback program in light of the offer.
* NN Group may have to sweeten its bid, raising its offer to€5.80 per share, De Telegraaf writes,citing ING analysts, who also noted uncertainty regarding Delta Lloyd's mainshareholders, Fubon, which is said to be keen to increase its 20% stake.
* Low interest rates and increased costs may forceBNP Paribas Fortis SAto close as many as 40 of its 787 branches in Belgium, Het Financieele Dagblad reports.
* CrelanNV is preparing a restructuring plan that is likely to result injob losses, accordingto L'Echo, which says details willbe released after a board meeting in two weeks.
* The Belgian government is considering scrapping thecontroversial speculation tax, De Tijdsays.The tax, which forces investors to pay 33% on any profit they make from shares,options and warrants if they buy and sell within six months, was introduced inJanuary. L'Echo also reports.
SPAIN AND PORTUGAL
Popular Españolrestructuring entails 302 branch closures: will close302 branches and reduce regional headquarters to 25 under its new restructuringplan, Expansión reports.
* Portuguese authorities informally set the end of October asthe deadline for candidates to present proposals for the acquisition ofNovo Banco SA, Público reports.If the offers are not attractive, the alternative solution will be prioritized,with China Minsheng Banking Corp.Ltd. expected to emerge as a leading investorin a private placement, Jornal deNegócios adds.
* Weeks before a crucial decision on Portugal's investmentgrade status, DBRS — the only one among the big four rating agencies to stillmaintain the country's investment grade rating — warned that the Portugueseeconomy is stuck in a "vicious cycle" of high debt, low growth andstalling economic reforms, the FinancialTimes notes.
ITALY AND GREECE
Apollo, Atlante mull joint bid for 4 rescued lenders:Apollo and Italy's Atlante fund are discussing the possibility of making ajoint offer for the four Italian banks bailed out last year if an alternativedeal that would see Unione diBanche Italiane SpA purchase three of the four lenders fallsthrough, Il Sole 24 Ore says.
* Banca Montedei Paschi di Siena SpA is expected to allow investors to take partin a voluntary conversion of their subordinated bonds into equity ahead of theconstitutional referendum slated for Dec. 4, while the bank's capital increaseof up to €5billion is expected to begin immediately after the referendum and complete byChristmas, MF writes.The Qatari and Kuwaiti sovereign wealth funds could buy shares in the capital increaseand also each invest roughly €1billion in the senior tranche of nonperforming loans the bank is preparing tosell, Il Messaggero says.
* Veneto BancaSpA has called a shareholders meeting for Nov. 16 to vote onpossible legal action against previous management, Reuters notes.
* BancaGenerali SpA General Manager Gian Maria Mossa tells Il Sole 24 Ore that thebank is not in negotiations to buy FinecoBank SpA.
* Attica BankSA Deputy CEO Athanasios Tsadaris said the bank will issue €380million of government-guaranteed bonds that will be used as collateral for thebank to receive Emergency Liquidity Assistance from the central bank, Euro2day writes.
Nordea offer for ABNAMRO shunned: Nordea Bank AB(publ) has been in takeover talks with Dutch lender in recentmonths, but the Netherlands, which owns 77% of ABN, turned down the offer, Het Financieele Dagblad reports.Berlingske Tidende also covers.
* said its board ofdirectors does not recommend that its shareholders accept 's mandatory offer. The boardbelieves the bid does not represent an attractive offer price.
* Topdanmark alsoannounced its profit forecast model for 2017, saying it expects a practicallyunchanged premium level for nonlife insurance in 2017, and a combined ratio of90% to 91%, excluding run-off.
* Danish industrialist and investor Eigild BødkerChristensen is thought to have acquired a minority shareholding in . The size of theequity purchase is not known, FinansWatch writes.
Asya shops insuranceunits: Asya Katilim BankasiAS, whose banking license was canceled in July, has put insurancesubsidiaries Asya Emeklilik ve Hayat and Isik Sigorta on sale for 33.2 millionlira and 40.8 million lira, respectively, Sigorta Medya says.
* The N1.1 core capital adequacy ratio of fell below 5.1% in September, after which the bank wrote off 1.5 billion rublesof subordinated debt to maintain its core capital ratios, Vedomosti says.
* The authorities of Sevastopol, a city in Russia-annexedCrimea, decided not to transfer a 25% holding in Genbank to the Crimeangovernment, Kommersant writes. The transfer was needed inorder to consolidate Genbank with Black Sea Bank of Reconstruction andDevelopment.
* Polish regulator FSA will verify the size of individualcapital buffers for banks with FX mortgage exposure by the end of October, PAP says,citing FSA deputy head Wojciech Kwasniak. Also, the FSA is working on arecommendation for banks to start offering fixed-rate mortgages in Poland, Rzeczpospolita and Parkiet write.
* RaiffeisenBank International AG CFO Martin Gruell said the bank will most likely have to keep the Swiss franc loanportfolio of its Polish unit, Raiffeisen Bank Polska SA, Reuters reports. RBI CEOKarl Sevelda said the management board will most likely not propose adividend for 2016.
* Azerbaijan's Bank Standard CJSC was declared bankrupt and its licenserevoked, Reuters reports.
* Low interest rates will continueto negatively affect revenue and profits of Hungarian banks in the next fewyears, although all major financial institutions expect to end 2016 in theblack, Reuters reports, citing the CEOs of various Hungarian lenders.
* The share of problem loans in the Ukrainian banking systemstood at 30.6% at the beginning of September, Delo.ua says,citing the Ukrainian central bank. The regulator noted, however, that thefigure could be higher because banks with Ukrainian capital are slow inrecognizing problem loans and setting aside required provisions to cover them.
IN OTHER PARTS OF THEWORLD
Asia-Pacific: Goldman buys Postal Savings Bank shares; RBI eases interbank loan norms
Middle East & Africa: Bank Hapoalim raises provisions; Emirates Islamic launches rightsissue
Latin America: Banco do Brasil ends partnership with postal service; Fenabansweetens wage proposal
North America: Caldwell Holding to buy Progressive National in Louisiana; 2Wisconsin banks strike MOE
North America Insurance: MetLife to spin off retail biz; insurers, reinsurers brace forMatthew losses
NOW FEATURED ONS&P GLOBAL MARKET INTELLIGENCE
Data DispatchEurope: European banks meet leverage mark, but could face G-SIB add-onchallenge: European banks are generally well-placed to meet globalstandards on leverage that come into force at the start of 2018, but thebiggest lenders could be squeezed by regulatory add-ons, according to datacompiled by S&P Global Market Intelligence.
Bankers fear'hard Brexit' as UK Tories fall out of love with the City: The U.K.Conservative Party has long championed bankers. That may be changing, just asBrexit talks mean bankers need government help more than ever.
As memory of$81M cyber heist lingers, SWIFT faces threat to dominance: Asquestions arise over the security of the SWIFT international money transfersystem, tech-savvy startups are trying to establish a foothold in the market.
Xana Kakoty, Ed Meza,Danielle Rossingh, Esben Svendsen, Beata Fojcik, Thanasis Kakalis, Ali Kayalar,Heather O'Brian, Brian McCulloch, Praxilla Trabattoni and Mariana Aldanocontributed to this report.
The Daily Dosehas an editorial deadline of 7 a.m. London time. Some external links mayrequire a subscription.