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Fitch upgrades Portugal, Ireland; France eyes cap on banks' corporate exposures


Banking Essentials Newsletter: January 11th Edition


Banking Essentials Newsletter December 21st Edition


The Road to Basel IV: Navigating the challenge facing European banks


Basel Framework- Utilizing data to analyze the capital position of European banks.

Fitch upgrades Portugal, Ireland; France eyes cap on banks' corporate exposures

* The European Securities and Markets Authority said it is considering prohibiting the marketing, distribution or sale of binary options to retail investors and restricting similar actions on contracts for differences, including rolling spot forex. The regulator said it will conduct a brief public consultation on the issue in January 2018. The U.K. Financial Conduct Authority expressed support in ESMA's consideration of potential EU-wide product intervention, noting that any permanent FCA policy measures would take in to account any prospective ESMA measures.

* EU leaders have agreed to begin negotiations with the U.K. over their post-Brexit trading relationship after agreeing to terms of a "divorce deal," but Germany's leader warned that tough talks lie ahead once London clarifies what it is seeking.

* Meanwhile, the completion of the banking union and the transformation of bailout fund European Stability Mechanism into the so-called European Monetary Fund were identified as priorities for eurozone integration by the EU leaders, Reuters reported.

* French Finance Minister Bruno Le Maire said his country intends to propose at the G20 summit in April 2018 that the group's members discuss regulation of the bitcoin, Reuters wrote. Les Echos also covered.


* The U.K. Financial Conduct Authority said it will take a broader review of the roughly $4 billion initial coin offering market's "fast-paced developments" to determine if new regulations are necessary. Bloomberg News covered.

* Lloyds Banking Group Plc is accused of using the money borrowed from the Bank of England's Term Funding Scheme to boost its profits rather than increase lending, The Daily Telegraph wrote. The group emerged as the largest user of the scheme, having borrowed £20 billion of the £100 billion lent by the regulator and reducing lending to consumers and businesses since the launch of the scheme in August 2016.

* Fitch Ratings upgraded Ireland's long-term foreign and local currency issuer default ratings to A+ from A with a stable outlook, reflecting the improving health of the Irish banking sector and falling government and household debt.

* Atlas Merchant Capital, an investment vehicle founded by former Barclays Plc CEO Bob Diamond, is said to be in talks to acquire a stake in digital lender Tandem, insiders told Sky News. A decision regarding a potential agreement is expected over the next few days.

* U.S. hedge fund Lone Pine Capital, London Stock Exchange Group Plc's fifth largest investor, is expected to be among the few to back calls for the immediate removal of LSE Chairman Donald Brydon in tomorrow's vote, The Telegraph wrote. Activist investor TCI Fund Management Ltd., which is campaigning for Brydon's ouster, is reportedly no longer expecting victory, with the Qatar Investment Authority, BlackRock, Aviva Plc unit Aviva Investors and Standard Life Aberdeen Plc seen to vote against it.

* Barclays Plc is set to upgrade Jan. 3 its trading platform for all financial products traded on exchanges as part of its duties as a so-called systematic internalizer in compliance with the EU's revised Markets in Financial Instruments Directive, or MiFID II, Reuters reported.

* London market insurance broker Bretton Woods received a license from the U.K. Financial Conduct Authority to operate as an independent and authorized firm, Reinsurance News reported, citing CEO Dan Goggin.

* Insurance start-up InsurePal said it plans to launch a £15 million initial coin offering, or ICO, to finance its U.K. motor launch in the first half of 2018, City A.M. wrote. The ICO is set to close Jan. 16, 2018.

* In response to the European Securities and Markets Authority's proposals to improve investor protection for retail clients, CMC Markets Plc said the proposed changes may have an impact on the group but noted that it welcomes a consistent approach to regulation, a 'level playing field' and the raising of standards in the industry. IG Group Holdings Plc, meanwhile, said any financial impact from the implementation of ESMA's proposals is unlikely to be significant in the current financial year.


* A U.S. district court dismissed a lawsuit by the Wertheim Jewish Education Trust, representing the heirs of a prominent Jewish family, brought in against Deutsche Bank AG and claiming $3 billion in family money allegedly withheld by the bank since the Nazi era, Reuters cited a report in Der Spiegel.

* Pierin Vincenz, president of the board of directors of Helvetia Holding AG, is stepping down from his post with immediate effect in the wake of an investigation by the Swiss financial market supervisory authority FINMA into alleged conflicts of interest during his time as CEO of Raiffeisen Gruppe Switzerland.

* DekaBank Deutsche Girozentrale is renaming unit LBB-Invest GmbH, which it took over in 2014 from Landesbank Berlin AG, as Deka Vermögensmanagement GmbH and plans to position it as "competence center for asset management products and boutique funds," Fondprofessionell reported. By end-2019, all 115 employees would be asked to relocate from Berlin to the bank's headquarters in Frankfurt.

* Hartwig Löger, CEO of UNIQA Insurance Group AG unit Uniqa Osterreich Versicherungen AG, was appointed Austria's new finance minister.

* Dirk Klee, COO of the private banking unit UBS Wealth Management of UBS Group AG, told Finews that more than 80% of the unit's global AUM, or around CHF800 billion, have been moved to the bank's new, fully digital One Wealth Management Platform, which allows for 20% operative cost savings through global synergy effects.


* French regulatory body Haut Conseil de Stabilité Financière is proposing that systemic banks be forced to limit their exposure to the most debt laden big French companies at 5% of their reserves, Les Echos reported. Approval for the measure is expected from European authorities in the New Year. La Tribune and Le Monde also covered.

* The French government is to push insurance companies to make sure they have "green" funds included in their offers of assurance-vie regulated savings accounts, Les Echos reported. It is also to promote existing Livret de Développement Durable et Solidaire, or LDDS, funds held at Caisse des Dépôts et Consignations as a "green" alternative to other investments, although environmental groups discovered that LDDS funds have been used to invest in fossil fuel companies, Les Echos wrote.

* Olivier Schel, a specialist in Internet and investment capital, was appointed deputy CEO of Caisse des Dépôts et Consignations, Les Echos reported.

* The French finance ministry ordered a consultation on allegedly abusive bank tariffs to be carried out by the Conseil Consultatif du Secteur Financier to see if more government controls are needed, Le Figaro reported.

* Achmea BV unit Achmea Bank NV named Huub Arendse chairman of its supervisory board, effective Jan. 1, 2018. Arendse will replace Petri Hofsté.

* Rabobank has sold its Roparco mortgage loan business to Dutch mortgage provider RNHB.

* As of Jan. 1, 2018, the ECB requires Rabobank to maintain a total Supervisory Review and Evaluation Process capital requirement of 9.75% on a consolidated and unconsolidated basis, and a total common equity Tier 1 ratio minimum requirement of 6.25%.

* The LIBOR scandal continues to haunt Rabobank, with the lender being sued by claim foundation Elco for rigging benchmark interest rates, Het Financieele Dagblad reported. The case will be heard by a court early next year.


* Fitch raised Portugal's long-term foreign and local currency issuer default ratings to BBB from BB+ with a stable outlook, citing an expected decline in the country's gross general government debt, or GGGD.

* Banco Santander SA issued €764 million of perpetual bonds as part of a commercial offer to compensate certain retail clients who acquired shares and subordinated debt of Banco Popular and lost their investment when the bank was wound up and sold for a symbolic €1 in June to Santander, Europa Press reported.

* The capital ratios of Banco de Sabadell SA, Ibercaja Banco SA and Kutxabank SA exceed the requirements established by the ECB for 2018 in the context of the supervisory review and evaluation process, Europa Press wrote.

* Haitong Bank SA, formerly Banco Espirito Santo de Investimento, said that it would divest its London and New York branches. Both entities will no longer be subsidiaries of Haitong Bank and will be excluded from the respective consolidation perimeter. The statement does not reveal the values that may be involved, Observador reported.


* Banca Monte dei Paschi di Siena SpA Deputy Chairman Antonino Turicchi — a top manager at Italy's Treasury, which now controls the bank — could be named as the new chairman after incumbent Alessandro Falciai dropped out of the running, Corriere della Sera wrote. It comes as Falciai is among individuals under investigation by prosecutors for corporate misdeeds involving his nautical company Mondomarine.

* Generali has signed a share purchase agreement with Life Company Consolidation Group to sell its entire shareholding in Ireland-based Generali PanEurope. The transaction is expected to complete in the first half of 2018.

* UniCredit SpA shareholder Leonardo Del Vecchio told Corriere della Sera that the bank is moving in the right direction but should seek a merger with another lender.

* About half of Banca Carige SpA's unexercised cash call rights were taken up on Friday, the first day of a five-day market offering, Reuters said. Carige's shareholders took up 66% of the €500 million share issue.


* Latest investigations into Danske Bank A/S's Estonian branch suggests that the Tallinn-based operation had been used by criminal organizations and individuals to launder money years before illegal activities were detected this year, Berlingske Tidende reported.

* OP Financial Group is well-advanced in co-determination talks to streamline the retail side of its bank branch operation across Finland. Negotiations with 13 cooperative banks in the OP Pankki sphere have been concluded, while two are still ongoing, Kauppalehti wrote.

* Qliro Group AB, a Stockholm-based digital commerce and financial services company, has named Carolina Brandtman as the new head of Qliro Financial Services. Brandtman was recruited from Santander Consumer Bank Sweden, where she was managing director. Brandtman will begin her new role at Qliro Financial Services in the fourth quarter of 2018, Affärsvärlden reported.


* The Russian central bank cut its key rate to 7.75% from 8.25%, and warned of possible further loosening of monetary policy in the first half of 2018 as a production-cuts deal by oil-exporting countries lowered uncertainty over energy-related inflationary risks.

* The Russian central bank estimates that PAO Promsvyazbank, which the regulator decided to bail out, will need between 100 billion Russian rubles and 200 billion rubles in additional funding, Kommersant reported. Citing the central bank's deputy head Vasily Pozdyshev, Reuters added that the regulator intends to honor all financial obligations of the lender, with the exception of its subordinated debt.

* The Russian central bank revoked the license of JSC Commercial Bank Solidarnost and placed the lender into provisional administration until the appointment of a receiver or a liquidator.

* The Russian central bank also put B&N Bank into the provisional administration of the Banking Sector Consolidation Fund Management Co.

* The shares of Warsaw Stock Exchange-listed debt collector GetBack SA were falling Dec. 15 following reports about the arrest of one of its employees over illegal access to Poland's national ID number database to obtain personal data of debtors, news agency PAP reported.

* The Polish Financial Supervision Authority asked PKO Bank Polski SA to maintain an additional capital buffer of 0.61 percentage point at the group level on its forex mortgage exposure, and a stress test buffer at 2.86 percentage points, news agency PAP reported.

* Meanwhile, Bank BGZ BNP Paribas SA was asked to maintain an additional capital buffer of 0.6 percentage point for its forex mortgage portfolio, down from the previously required 0.68 percentage point, PAP said.

* S&P Global Ratings upgraded Serbia's long-term foreign and local currency sovereign credit ratings to BB from BB- with a stable outlook, citing its stronger fiscal metrics and improved revenue performance. Meanwhile, Fitch upgraded the country's long-term foreign- and local-currency issuer default ratings to BB from BB- with a stable outlook.

* Fitch revised the outlook on Armenia's long-term foreign- and local-currency issuer default ratings to positive from stable, while affirming the ratings at B+, citing its stronger external demand conditions and its sustainable monetary policy framework, among other factors.


Asia-Pacific: ANZ to buy back up to A$1.5B of shares; ICICI Securities files for IPO

Middle East & Africa: South Africa's ANC to have new leader; Arab Bank chair released from detention


Foreign investors warn of coal black spot in China green bond market: China must do more to attract foreign investors to its burgeoning green bond market if the country is to meet aggressive environmental targets, industry observers say.

Bank of England: 'Modest' deterioration in U.K. household debt position: British households have seen a "modest" deterioration in their balance sheets over the past year, and are more pessimistic about the impact of Brexit on the economy, according to research from the Bank of England and NMG Consulting.

EIOPA to factor green investments into next stress test: The effect of environmental, social and governance principles on pension funds' investment strategies will be one of the pan-European insurance and pensions regulator's strategic priorities in 2018, its chairman said.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.

Sheryl Obejera, Rodeza Mones, Arno Maierbrugger, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Heather O'Brian, Brian McCulloch, Praxilla Trabattoni and Mariana Aldano contributed to this report.

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