* Italian lender UniCredit SpA is looking into a potential merger with French rival Société Générale SA, although no formal approach has been made, the Financial Times reported.
* The European Securities and Markets Authority said it has formally adopted a ban on the marketing, distribution and sale of binary options to retail customers and a limit on such activities with respect to contracts for difference.
* France has urged the EU to impose tighter controls on foreign investment banks looking to operate in the bloc post-Brexit, saying equivalence decisions should "continuously be assessed over time and in a consistent manner," Reuters reported.
* Commissions paid to investment banks and brokers from global asset managers in the first quarter dropped 28% and 30% in the U.K. and the rest of Europe, respectively, compared to the same period in 2017, the Financial Times wrote, citing research from Investment Technology Group on how Europe's Markets in Financial Instruments Directive II has shaken up markets.
* Card payment service Visa Inc. said it has resolved a technical issue that affected customers across Europe last Friday. The issue was caused by a hardware failure within one of the company's European systems.
UK AND IRELAND
* CYBG PLC revised its proposal to acquire Virgin Money Holdings (UK) PLC, raising the stake that the latter's shareholders will own in the combined group to approximately 38% from 36.5% in the previous offer. The deadline to make an offer has been extended to June 18.
* TSB Banking Group PLC's employees are quitting the lender in frustration over the way management has handled the IT crisis that has engulfed the bank since April, sources told The Times. Meanwhile, a British lawmaker said TSB may have breached new General Data Protection Regulations rules after customers were sent each other's private data, such as reference numbers, in a botched mail and could face scrutiny from the information commissioner, City A.M. wrote.
* U.S.-based Citigroup Inc. is the first corporate bank to enroll as a payment initiation service provider under the U.K.'s open banking regime, allowing its customers to receive small payments directly from their British bank accounts, the Financial Times reported.
GERMANY, SWITZERLAND AND AUSTRIA
* The ECB and top Deutsche Bank AG shareholder HNA Group Co. Ltd. separately said they backed the strategy of retrenchment of the German lender's management, Reuters reported. ECB insiders told the news agency that the U.S. Federal Reserve's "troubled" classification of Deutsche Bank was based on old data that did not reflect its restructuring progress or strategy.
* German regulator Bafin has granted Nomura Holdings Inc. a securities trading license for its post-Brexit EU base in Frankfurt. The new unit will be called Nomura Financial Products Europe GmbH.
* Munich Re Co.'s ERGO Group AG is expanding outside the German market for the first time with a direct online insurance offering in Austria, Handelsblatt wrote. ERGO plans to later enlarge the offering to include other types of insurance and is also looking to expand into other EU countries without having to set up subsidiaries, thus keeping costs manageable, according to ERGO Chief Digital Officer Mark Klein.
* German public health insurance company Barmer allegedly committed billing fraud against the country's health funds, which collect and distribute money paid into Germany's statutory health insurance system, of some €400 million, Bild am Sonntag reported, citing confidential documents from Berlin officials investigating the case. Barmer has denied the allegations.
* The Swiss government has opened a nearly four-month public consultation period on a draft law aimed at improving the effectiveness of its controls against money laundering, Finews.com reported.
FRANCE AND BENELUX
* Société Générale SA
* Belgium's central bank raised the required capital reserves for banks, with a targeted requirement of a 33% rise in the weighting requirements for mortgage lending, based on the average risk of mortgage portfolios in each bank, L'Echo reported. Together with a 2013 requirement of a 5% rise in capital reserves, the new measure will bring to €1.5 billion the buffer required for Belgian banks involved in residential lending.
* A group of 21 executives said ABN AMRO Group NV's boards lacked direction, Reuters reported, citing Het Financieele Dagblad. In letters sent to regulators and the Dutch government earlier this year, the managers reportedly said the bank could become a takeover target.
SPAIN AND PORTUGAL
* Socialist Pedro Sánchez became prime minister of Spain on June 1 after winning a no-confidence vote against conservative incumbent Mariano Rajoy. Fitch Ratings noted that the establishment of a new government in Spain has limited impact on the country's sovereign credit profile as near-term changes to economic and fiscal policy are unlikely.
* Banco Bilbao Vizcaya Argentaria SA has completed an £85.4 million investment in U.K. mobile bank Atom, taking its stake in the entity to 39%, Europa Press wrote.
ITALY AND GREECE
* Banca Monte dei Paschi di Siena SpA is preparing the sale of €2 billion in unsecured nonperforming loans following its recent €24 billion bad loan securitization, Il Sole 24 Ore said.
* The sale process for the 40% stake in Italian asset management group Arca Holding being sold by liquidators of Veneto Banca SpA and Banca Popolare di Vicenza SpA has officially begun, with expressions of interest due June 12 and binding offers seen by July 10, Il Sole 24 Ore wrote. BPER Banca SpA and Banca Popolare di Sondrio SCpA, which respectively own 32.7% and 21.3% in Arca, are considered to be in pole position to buy the stake.
* Fitch Ratings revised San Marino's outlook to negative from stable, while affirming its long-term foreign- and local-currency issuer ratings at BBB-.
NORDIC COUNTRIES
* Gjensidige Forsikring ASA CEO Helge Leiro Baastad said the Norwegian insurer is anticipating a "marginal sum" of just below 100 million Norwegian kroner in total market flood damage in the second quarter.
* Swedish financial group Catella is conducting a strategic review of banking arm Catella Bank SA's operations in Luxembourg, Realtid reported. Catella said the current structure involves extensive capital and regulatory requirements, which affect cost and capital structure.
* The Danish FSA has given the Faroe Islands bank Norðoya Sparikassi several orders after an inspection, including increasing write-downs of approximately 5 million Danish kroner and solvency requirement to 10.3% from 9.6%, Finanswatch reported. The bank must also ensure better separation of functions and prioritize compliance and risk management work.
EASTERN EUROPE
* Moody's placed Turkey's ratings on review for downgrade, including its Ba2 long-term issuer ratings and Ba2 senior unsecured bond ratings. Meanwhile, Fitch placed 25 Turkish banks' long-term foreign-currency issuer default ratings and viability ratings on Rating Watch Negative.
* The anti-immigrant Slovenia Democratic Party won the country's parliamentary elections June 3 but may struggle to form a government due to a lack of possible coalition partners, media reports said.
* Sergei Shkodinsky was appointed general director at Otkritie Holding JSC, taking over from the company's founder and shareholder Vadim Belyaev, Vedomosti reported. Belyaev was appointed head of the holding in August 2017, shortly before the Russian central bank took over its main asset, Otkritie Financial Corp. Bank.
* Vnesheconombank plans to reduce its workforce by up to 50%, with the move expected to help the lender save between 2 billion Russian rubles and 3 billion rubles per year, Kommersant reported. Vnesheconombank also announced that it opened a representative office in Abu Dhabi.
* GetBack SA's former head, Konrad Kakolewski, sent a letter to the Polish Financial Supervision Authority with a list of companies potentially interested in investing into the financially troubled debt collector, Parkiet reported. The list includes large funds and investment companies.
IN OTHER PARTS OF THE WORLD
Asia-Pacific: 2 Australian insurers scrap merger plans; Westpac may shut funds management unit
Middle East & Africa: Israel eases process for prospective new banks; Nigeria Re said to eye 2018 IPO
NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE
Spanish banks seen under pressure from domestic politics, Italian instability: An expected vote of no confidence in Spain's prime minister may cause banks to tighten up their lending on fears of political instability, but uncertainty over Italy is more likely to weigh on sentiment toward bank shares, analysts say.
RBS sale delayed by management changes, market risks, say analysts: The British government is now likely to start selling stock in RBS toward the end of 2018 and no earlier than August, according to analysts.
EY: US tax reform to hit 'large number' of Lloyd's underwriters: The introduction of the Base Erosion and Anti-Abuse Tax in the U.S. will hit Lloyd's insurers in particular because of its strong U.S. presence, EY tax partner Jeff Soar said.
Sheryl Obejera, Ed Meza, Danielle Rossingh, Esben Svendsen, Beata Fojcik, Heather O'Brian, Brian McCulloch, Sophie Davies and Mariana Aldano contributed to this report.
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