* Qatari investment group Al Faisal Holding and Switzerland's Interritus Ltd. are in talks about a potential takeover of troubled British lender Co-operative Bank Plc, insiders told Sky News. The two investment groups are said to be prepared to take a long-term approach in turning the troubled U.K. lender around.
MIDDLE EAST AND NORTH AFRICA
* Moody's said tensions between Qatar and other Gulf Cooperation Council countries will be credit negative for Qatari banks because of their high reliance on confidence-sensitive foreign funding. The rating agency expects the diplomatic rift to have limited immediate effects for other GCC banking systems.
* Qatar's central bank has asked commercial banks to provide detailed daily reports on their foreign exchange trading as well as deposit withdrawals and money transfers amid signs that certain foreign portfolio investment funds have been withdrawing money from Qatar due to the diplomatic dispute between the country and neighboring Gulf states, insiders told Reuters. The lenders are now also required to provide weekly breakdowns of customer deposits by maturity and type from Gulf Cooperation Council countries and Egypt, among other countries, the sources added.
* Qatari Foreign Minister Mohammed bin Abdulrahman al-Thani said the country will "never be ready to surrender" by changing its foreign policy to resolve an intensifying dispute with fellow Arab states over its alleged support of terrorism, adding that Doha has yet to receive a list of demands from countries that severed diplomatic ties with it, Reuters reported.
* Bahrain and Egypt, meanwhile, gave no indication that they were prepared to soften their stance on Qatar following a meeting between Bahrain's King Hamad bin Isa Al-Khalifa and Egyptian President Abdel Fattah al-Sisi yesterday. "Qatari interference left us with no choice but to take the measures we took to preserve the security and stability of our countries," the Bahraini king said after the meeting, Al Arabiya reported.
* Saudi Arabia, the United Arab Emirates, Egypt and Bahrain named 59 individuals and 12 entities with alleged links to Qatar as terrorists, Reuters reported.
* The UAE's Securities and Commodities Authority has permitted Emirates NBD Bank PJSC to conduct activities in local financial markets, becoming the first local institution to be granted a clearing role, The National wrote.
* Obaid AlZaabi, head of UAE Securities and Commodities Authority, said the regulator is working on a new law regulating mergers and acquisitions in the market, Al Khaleej reported. The new law will reportedly be ready within one month.
* Fitch Ratings downgraded Ahli Bank SAOG's viability rating to "bb+" from "bbb-" and affirmed the bank's BBB-/F3 long- and short-term foreign- and local-currency issuer default ratings, reflecting the lender's weaker funding profile relative to its peers, particularly its high reliance on wholesale funding and high deposit concentration.
* Moody's assigned Baa3 and Prime-3 long- and short-term local- and foreign-currency deposit ratings to Oman-based Bank Nizwa SAOG, among other ratings, noting the lender's high capital buffers, moderated by rapid growth in recent years.
* Moody's maintained a stable outlook on the Israeli banking system, reflecting the agency's expectation of an improving operating environment, low levels of nonperforming loans as well as sound funding structure and liquidity buffers.
* Kuwait's local banks expressed to the central bank their concerns about the implementation of the common reporting standard, saying they fear that the practice may impact the secrecy of clients' accounts, Al Rai Media reported.
* Solidarity General Takaful and Al Ahlia Insurance, which are set to merge later, are set to reduce the number of their combined branches following the merger to 10 from 12.
* Bank Sohar SAOG said the second one-third tranche of mandatory convertible bonds of 7.15 million Omani rials, issued in 2013 and amounting to 2.38 million rials, was converted to common equity shares in the bank in April.
* Fitch said Islamic banks in Morocco will likely deliver a moderate stimulus to boost the country's deposit base. The agency added that it expects the growth of Islamic banks in Morocco to be high initially and will be driven by several factors, including the spread of awareness of Islamic finance and the magnitude to which the government stimulates expansion.
EAST AND WEST AFRICA
* Eleven Kenyan banks, including Equity Group Holdings Ltd. and KCB Group Plc, have agreed in principle to convert most of the $225 million loans to loss-making Kenya Airways into equity, the Financial Times wrote. The Kenyan government has pledged to pay the banks $75 million in 2027 if the airline's share price does not increase to a certain level.
* Dubai Islamic Bank (PJSC) has commenced operations in Kenya two months after receiving a license from the Central Bank of Kenya. The lender will initially open three branches in the country and aims to use its entry into the Kenyan market as a launch pad to expand its scope into East Africa, Citizen TV reported.
* Kenya-based CIC Insurance Group Ltd. pledged to support the operations of its loss-making regional units in South Sudan, Uganda and Malawi, some of which have been rendered technically insolvent following years of losses, Business Daily Africa reported. The firm said it is confident that the units will turn around and report a profit in the long run.
* The Nigerian government will kick off an international roadshow on Tuesday for its sale of diaspora bonds, with meetings planned in the U.K., Switzerland and the U.S., Reuters wrote, citing the country's debt management office. The bonds will be listed in London.
* A sovereign debt issue by Ivory Coast has attracted $5.75 billion in subscriptions, Agence Ecofin said.
CENTRAL AND SOUTHERN AFRICA
* The Central Bank of the Central African States is developing plans for an emergency liquidity facility, Agence Ecofin said. Several Central African banks are facing liquidity problems due to low oil prices, said Abbas Tolli, the regional central bank's governor.
* Pierre Moussa, head of the commission of the Economic and Monetary Community of Central Africa, will step down from his post in August, Jeune Afrique reported. He will be succeeded by Daniel Ona Ondo, a former prime minister of Gabon. Also stepping down is Rafael Tung Nsue, head of the Central African Financial Market Supervisory Commission.
* Banco de Poupança e Crédito SA's financial restructuring will be monitored by an ad-hoc commission appointed by Angola's finance minister, Macauhub wrote.
* Fitch director Jan Friederich said South Africa will likely miss its revenue forecasts announced in its February budget as political infighting within the ruling African National Congress party dent business confidence in the country, Reuters reported. Friederich added that weakness in managing state-owned firms pose a risk to fiscal deficit targets.
* Brian Kahn, a member of the South African Reserve Bank's monetary policy committee, said reducing interest rates is not the solution to the country's recession and stressed that political turmoil and deep economic weakness should be addressed first, Reuters reported. Kahn said the central bank should act cautiously as further rating downgrades driven by political uncertainty may have a more severe effect on markets.
* South Africa's cabinet appointed Dondo Mogajane as the Treasury's new director-general. He has been acting director general of the Treasury since Lungisa Fuzile stepped down, Independent Online wrote.
* South Africa's Rand Merchant Investment Holdings Ltd. and Nedbank Group Ltd.'s private equity arm acquired minority stakes in Stellenbosch-based financial technology firm Entersekt Pty Ltd. in a "multi-million-dollar transaction."
* South Africa's property and casualty insurers, including Santam Ltd., Old Mutual Plc's Mutual & Federal and Rand Merchant Investment Holdings' OUTsurance unit, could face pressure on their profits after Cape Town was hit by its worst storm in 30 years, Bloomberg News reported.
IN OTHER PARTS OF THE WORLD
Asia-Pacific: Citi to boost Asia wealth biz; UK's Conservatives lose majority, exit poll shows
Europe: UK votes in snap election; Allianz eyes full Euler Hermes takeover
Latin America: Banco del Bajío prices IPO; lending growth slows in Peru
North America: BCB Bancorp buying IA Bancorp; Comey to testify before Senate panel
North America Insurance: NY insurers seek rate hikes; McConnell supports pre-existing illness protection
Sheryl Obejera, Henni Abdelghani, Pádraig Belton, and Helen Popper contributed to this report.
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