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Metro Bank raises £375M; banks raided in Germany; ABN Amro Q1 profit falls


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Investment Banking Essentials Newsletter April Edition - 2022


Banking Essentials Newsletter April Edition - 2022

Metro Bank raises £375M; banks raided in Germany; ABN Amro Q1 profit falls

S&P Global Market Intelligence offers our top picks of banking news stories and more published throughout the week.

Possible transactions

* German bank Landesbank Hessen-Thüringen Girozentrale, also known as Helaba, and DekaBank Deutsche Girozentrale are reportedly in exploratory talks for a potential merger.

* Italian lender UniCredit SpA hired Lazard and JPMorgan as it intensifies efforts toward a possible takeover of Commerzbank AG. Dutch bank ING Groep NV is working informally with Perella Weinberg Partners for its possible rival bid for Commerzbank.

* Unipol Gruppo SpA intends to raise its 15% stake in BPER Banca SpA to 20% by the end of the first half, CEO Carlo Cimbri told Milano Finanza. Cimbri also said the group has not made any decision yet about the future of its bad loan management business Unipol Rec and could be open to value creating partnerships.

Collapsed deals

* Shares in Liberbank SA jumped more than 7% on May 15 after the bank said it had ended merger talks with Spanish peer Unicaja Banco SA.

* Talks between Germany's Deutsche Bank AG and Swiss group UBS Group AG on a potential merger of their asset management units have stalled following disagreement on who would control the combined entity, which would have more than €1.4 trillion of AUM, Reuters reported.

Financial results

* French bank Crédit Agricole SA reported first-quarter net income group share of €763 million, down from €856 million a year earlier.

* Dutch bank ABN Amro Group NV's first-quarter profit attributable to owners of the parent company fell to €452 million from €555 million a year earlier.

* Belgian bank KBC Group NV posted first-quarter consolidated after-tax result attributable to equity holders of the parent of €430 million, down from €556 million a year earlier.

* National Bank of Greece SA reported first-quarter profit after tax from continuing operations of €131 million, up from €25 million a year ago.

* U.K.-based CYBG PLC's profit in the six months ended March 31 was £29 million, compared with losses of £76 million a year ago.

* Polish lender PKO Bank Polski SA's first-quarter net profit attributable to equity holders of the parent company was 862 million Polish zlotys, up from 757 million zlotys a year earlier.

* First-quarter net income of Türkiye Halk Bankası AŞ was 305 million Turkish lira, down 61.4% from the same period in 2018.

* Bank of Cyprus Holdings PLC reported first-quarter after-tax profit attributable to owners of the company of €95 million, up from €43 million a year ago.

Scaling back operations

* Spain's Banco Santander SA intends to close 1,150 branches and cut more than 3,700 jobs in Spain as the bank integrates Banco Popular Español SA, which it acquired in 2017 for a symbolic €1.

* Swedish lender Svenska Handelsbanken AB (publ) plans to gradually wind down its operations in Estonia, Latvia and Lithuania in 2020, citing under-performance of the businesses despite measures to improve efficiency.

Regulators remain vigilant

* The European Commission fined Royal Bank of Scotland Group PLC, Barclays PLC, Citigroup Inc., JPMorgan Chase & Co. and Mitsubishi UFJ Financial Group Inc. roughly €1.07 billion over the manipulation of the foreign exchange market. The fines on the five banks were reduced because they cooperated in the probe and UBS Group AG avoided a fine of around €285 million for revealing the existence of cartels to the commission.

* The Central Bank of the Russian Federation could cancel the licenses of at least 46 local lenders during the next 12 months due to the violations of Russia's anti-money laundering legislation, problems with risk assessment and illicit withdrawal of liquid assets.

* The National Bank of Ukraine withdrew the banking license of PJSC Vernum Bank after the lender decided to voluntarily terminate banking activities without losing the status of a legal entity.

* German authorities led a raid of 14 banks as part of an ongoing investigation over suspected offshore tax evasion of wealthy individuals, looking for evidence against suspects who allegedly set up trusts in the British Virgin Islands, aided by a former local unit of Deutsche Bank AG.

* The National Bank of the Republic of Kazakhstan prepared a draft law to set up an independent body responsible for the supervision of the local financial sector, including the provision of loans to local citizens.

In other news

* Metro Bank PLC raised gross proceeds of roughly £375 million from its share placement, up from its initial target of £350 million, following strong demand from existing and new shareholders.

* U.K. banks are set to face a parliamentary hearing this summer over their gender pay gaps. Nicky Morgan, chair of the Parliament's Treasury select committee, told Bloomberg News that HSBC Holdings PLC, Goldman Sachs Group Inc., Barclays Bank PLC and some other big lenders will be asked to testify on how they plan to address the differences in pay.

* Lloyds Banking Group PLC board won an investors' vote on its remuneration report at the May 16 annual general meeting despite the bank coming under fire from MPs for "boundless greed." Yet 10% of investors did not support the payouts in the meeting. The group will begin paying quarterly dividends in 2020, with the dividend for the first quarter payable in June 2020.

* France's Société Générale SA received approval from the Australian Prudential Regulation Authority to operate as a foreign authorized deposit-taking institution in the country.

* The shareholders of UniCredit SpA authorized its board of directors to carry out the purchase and disposal of the lender's ordinary shares in order to delist them from trading on the Warsaw Stock Exchange.

Featured during the week on S&P Global Market Intelligence

KBC to shut Belgian branches, review management structure in cost-cutting drive: The Belgian lender will convert 65 branches into automated branches in 2019 and will close another 51 such branches as the majority of its customers bank online or by phone.

Crédit Agricole sees retail fees increasing as it seeks to offset weak rates: CFO Jérôme Grivet told analysts that the bank remains committed to the home loan market in France despite low margins as it is a key component of the bank's retail strategy.

ABN Amro faces challenges to hit cost, capital goals due to rates, regulations: The Dutch bank faces a challenge to achieve its 2019/20 cost and capital targets as a "more demanding" economic environment weighs on earnings while regulatory reforms may affect core equity ratios, CFO Clifford Abrahams said.

RBI execs upbeat about 2019 despite Q1 profit drop; stock closes 4% down: The Austrian group's first-quarter profit was down 43.3% year over year, mainly due to one-off factors, including the sale of its Polish unit, and performance should improve in 2019, executives said.