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Deutsche Bank slides; UBS, New York reach settlement; SocGen sets CET1 target


Banking Essentials Newsletter: 7th February Edition


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Deutsche Bank slides; UBS, New York reach settlement; SocGen sets CET1 target

* European Council President Donald Tusk has endorsed to EU leaders the draft 21-month transition deal struck by Brexit negotiators earlier this week, and said the EU will offer the U.K. an interim accord on Friday, Reuters wrote.

* Italian banking association ABI has called for a harmonization of new rules over nonperforming loans after the ECB and the European Commission presented differing proposals last week.

* Latvian central bank Governor Ilmars Rimševics is filing a lawsuit in Europe's top court against the Latvian government over its decision to restrict his ability to work as a member of the ECB's governing council, Reuters wrote. Rimševics was detained by the country's anticorruption agency last month on suspicion of bribery.


* The U.K. government is poised to announce today the creation of a new task force that will explore ways to harness the potential benefits of the technology underpinning cryto assets as part of efforts to boost the country's fintech sector, Reuters reported.

* The U.K. Financial Conduct Authority said it initiated a review of its penalties policy and aims to publish a consultation paper later this year. The regulator has levied £229.4 million in fines in 2017, a more than tenfold increase from £22.2 million a year earlier but still a sharp drop from the billion-pound highs registered in 2014 and 2015, the Financial Times noted.

* Allianz Group unit Pacific Investment Management Co. LLC is leading the race to acquire £5.5 billion of residential mortgage loans managed by the UK Asset Resolution, insiders told Sky News. UKAR also shortlisted U.S. hedge funds Cerberus Capital Management LP and Och-Ziff Capital Management Group LLC, and Prudential Plc's M&G Prudential as potential buyers.

* Barclays Plc CEO Jes Staley said he is "looking forward" to hear the views of the lender's new activist investor, Edward Bramson, whose firm Sherborne Investors acquired 5.2% stake of Barclays' voting rights earlier this week, Bloomberg News wrote. Bramson is said to be keen on pushing for a strategic change in Barclays.

* Standard Chartered Plc is set to start the process to sell its loss-making unit Standard Chartered Private Equity, insiders told Bloomberg News.

* Digital bank OakNorth Bank Ltd. is eyeing a further £1 billion of lending in 2018 after having turned its first-ever profit in 2017, according to CEO Rishi Khosla. The bank posted a profit of £10.6 million for the 2017 full year, compared with a loss of £2.4 million in 2016, making it the first of a cohort of U.K. digital-only banks launched since 2014 to make a profit.

* Metro Bank Plc said it is expanding its mortgage business into Scotland.


* Deutsche Bank AG's share price plunged yesterday to its lowest level since November 2016 after CFO James von Moltke warned that revenues in the German banking group's key corporate and investment banking unit will incur a €450 million impact in the first quarter from the strong euro and higher refinancing costs. The decline also came after the bank narrowed the price range of asset management unit DWS' IPO to between €32 and €33 per share from between €30 and €36 per share earlier.

* Landesbank Hessen-Thüringen Girozentrale, known as Helaba, reported full-year 2017 consolidated net profit after tax of €256 million under International Financial Reporting Standards, down 24.7% from €340 million earned in 2016.

* German mobile bank N26 GmbH is seeking to launch an eventual IPO, according to CEO Valentin Stalf.

* Deutsche Börse AG is facing a penalty from German financial regulator Bafin over an allegedly inadequate information policy on the succession of former CEO Carsten Kengeter, Wirtschaftswoche reported.

* UBS Group AG's New York-based units, UBS Securities LLC and UBS Real Estate Securities Inc., have reached a $230 million settlement with New York Attorney General Eric Schneiderman over claims that it missold residential mortgage-backed securities. Meanwhile, Hong Kong's securities regulator fined UBS Securities Asia Ltd. HK$4.5 million for its failure to record client facilitation trades and client consents.

* SIX Group AG will offload a majority stake in its Six Payment Services unit by the end of the second quarter or the start of the third quarter, according to CEO Jos Dijsselhof.

* Vienna Insurance Group AG posted full-year 2017 net profit after tax of €372.6 million under International Financial Reporting Standards, up 16.1% from €321.0 million a year earlier.

* Austrian financial regulator FMA imposed a penalty of €414,000 against Hypo Vorarlberg Bank AG after finding that the bank inadequately checked the identity of high-risk clients and did not notify the FMA about suspicions of money laundering.


* Société Générale SA Deputy CEO Severin Cabannes said the bank hopes to reach a settlement with U.S. authorities over two legal disputes — its alleged rigging of the London and Euro interbank offered rates and its dealings with the Libyan Investment Authority — in the coming weeks, and expects the €1 billion it has set aside for the two cases will be sufficient. Cabannes added that the bank is targeting a common equity Tier 1 ratio of 11.5% in 2018.

* A Dutch court has ruled Rabobank unlawfully increased the interest rate a property owner had to pay on its loans, Het Financieele Dagblad reported. The bank has been ordered to pay back the additional interest paid by the customer.

* Dutch insurer Achmea BV reported a net profit of €216 million for full year 2017, compared to a net loss of €379 million in 2016.


* The Spanish state will begin accelerating the privatization of Bankia SA from May through the sale of between 15% and 20% of the bank, Expansión reported. The state, which currently controls 61% of the entity via the restructuring fund FROB, wants to lower its participation to below 50%.

* Banco de Sabadell SA is negotiating deals to sell two portfolios of toxic real estate properties worth roughly €3.3 billion, insiders told Reuters.

* Caixa Geral de Depósitos SA CEO Paulo Macedo warned that the state-run Portuguese bank's market leadership could be threatened by mergers among its rivals, Jornal de Negócios reported. Macedo made the remark while outlining the targets of an ongoing restructuring and recapitalization plan that involves 2,000 job cuts by 2020. Macedo said the bank did not want to make deeper staffing reductions but added that technological changes could have an impact, Jornal Económico reported.


* Credito Valtellinese SpA Chairman Miro Fiordi said the lender will discuss potential merger opportunities with its new shareholders in the coming months after its recent €700 million capital increase made it more appealing to potential suitors, Reuters reported. The bank also aims to sell €2 billion in NPLs in the first half, MF said.

* Meanwhile, Crédit Agricole SA's Italy head, Giampiero Maioli, said the lender is not looking at Creval or Banca Carige SpA for any potential M&A deal.

* Banca Carige SpA is readying Project Isabel, which involves the sale €1.4 billion of nominal nonperforming exposures, MF reported.

* Lindorff Intrum Justitia has ended the due diligence on the purchase of a 51% stake in the NPL platform of Intesa Sanpaolo SpA as well as €10.8 billion of gross NPLs and is now working on the funding of the transaction and the search for equity with talks with potential investment partners, Il Sole 24 Ore reported, adding that an offer could be made in April.

* Italy's Constitutional Court ruled that the reforms of the Italian cooperative banking sector are legitimate and left unchanged the option given to lenders to limit the refund to shareholders who want to rescind, all dailies including MF wrote. Banca Popolare di Sondrio SCpA and Banca Popolare di Bari SCpA, the last two lenders who had blocked their transformation into joint stock companies pending the verdict, will now have to rush to abide to the reforms, Il Sole 24 Ore wrote.

* U.S. private equity fund J.C. Flowers & Co. LLC wants to invest in Italian banks and among the rumored targets is Banca del Fucino SpA, MF wrote.

* The Malta Financial Services Authority has seized control of Pilatus Bank following the arrest and indictment in the U.S. of its owner and chairman, Iranian businessman Seyed Ali Sadr Hasheminejad, news outlets including The Guardian and the Financial Times reported. The regulator has barred Pilatus Bank from conducting any banking transactions, removed Sadr from his position at the lender and suspended his voting rights.


* The Russian Deposit Insurance Agency will spend 113.4 billion Russian rubles to acquire 99.9% shares of PAO Promsvyazbank, with the funding to be provided by the Russian central bank in the form a property contribution, the regulator said. The DIA will also recapitalize Promsvyazbank before it is transferred into government ownership, Kommersant noted.

* The Russian central bank placed PJSC United Financial Capital Bank into provisional administration of the Deposit Insurance Agency for six months, citing the lender's unstable financial situation and the need to protect its creditors and deposit holders.

* Vnesheconombank's management board decided to merge units Globex Commercial Bank JSC and Sviaz-Bank, according to Kommersant. VEB also decided not to sell the merged lender in the near future.

* Alior Bank SA raised its holding in investment fund manager Money Makers TFI SA to 75.67% and plans to increase it further to over 90%, news agency PAP said.


Asia-Pacific: China names head of new financial regulator; Japan insurers to merge pension ops

Middle East & Africa: 2 Abu Dhabi funds merging; South Africa, Nigeria sit out African free trade pact

Latin America: Chile, Colombia maintain rates; Moody's ups BTG Pactual

North America: National Commerce to buy Florida bank; FOMC likely to raise rates

North America Insurance: Insurers eyeing cover for driverless cars; insurance M&A to accelerate globally


'Remedial action' needed to tackle Lloyd's rising loss ratio, says CFO: Lloyd's reported a 5.6 point deterioration in its underlying loss ratio, prompting CFO John Parry to say that "remedial action needs to be taken."

UK likely to seek tighter EU curbs on Russia banks after spy poisoning: lawyers: The U.K. will likely lobby the EU to toughen its sanctions against Russian state-controlled banks following the poisoning of a former Russian spy, according to two specialist lawyers.

Sheryl Obejera, Arno Maierbrugger, Danielle Rossingh, Esben Svendsen, Beata Fojcik, Yael Schrage, Brian McCulloch, Sophie Davies and Helen Popper contributed to this report.

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