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ECN charge hits Lloyds; drop in client activity dents Deutsche Bank; 4 Swedish banks face DFS probe

Banking Essentials Newsletter - November Edition

Online Brokerage Space Should Remain Rich Source Of M&A

University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts

Estimating Credit Losses Under COVID-19 and the Post-Crisis Recovery


ECN charge hits Lloyds; drop in client activity dents Deutsche Bank; 4 Swedish banks face DFS probe

Draghi ready to defend ECB inGermany: ECBPresident Mario Draghi said he is willing to appear before the Germanparliament to defend the central bank's loose monetary policies, Reuters reports. However, Draghi warned that"[a]ny perception that the ECB's independence is under attack can unsettlebusinesses and consumers," and could hurt the central bank's effectiveness.

*ECB data showed yesterday that lending to firms in March grew by 1.1% on ayearly basis, 10 basis points faster than in the previous month, Reuters writes.

* TheBank for International Settlements urged big lenders to curb dividend payoutsand share buybacks, and instead use cash to boost their capital or to lendmore, Reuters reports.

* Bank of NewYork Mellon Corp. is in talks to buy DBV-X, in a move that would see it enter Europe'srepurchase trading scene. London-based DBV-X, which was meant to be launched inthe last quarter of 2015, has instead separated from ,specifically the latter's interdealer broking arm, Tradition.

UKAND IRELAND

ECNcharge pulls Lloyds down:  today reported unauditedfirst-quarter statutory profitattributable to equity holders of £506 million, down year over year from £913million. Conduct provisions, which were not booked in the first quarter of2015, were £115 million. The bank also booked a £790 million charge relating tothe redemption of enhanced capital notes, compared to £65 million a year ago.

*Schroders Plc thismorning said AUM totaled £324.9 billion at March 31, compared to £313.5billion at the end of 2015. The company recorded first-quarter profit beforetax and exceptional items of £144.5 million, compared to £149.6 million in thefirst quarter of 2015.

*The U.K. Financial Conduct Authority yesterday published a report proposing a seriesof measures aimed at boosting the effectiveness of Britain's primary listed debtmarkets, including various practical service enhancements aimed at improvingthe "user-friendliness" of the FCA's listing processes.

*Banco Santander SA CEO José Antonio Álvarez saidthe lender is not looking at acquiring Royal Bank of Scotland Group Plc branches in the U.K.,Reuters reports.

*Standard CharteredPlc CEO Bill Winters tells Bloomberg News that he sees"very high volatility for the rest of this year and probably into nextyear," saying it is a "big challenge" to restore"depressed" revenue amid a slow-moving economy and falling commodityprices. Winters said the bank could pay out dividends again if the situationgets better.

*The Organisation for Economic Co-operation and Development, or OECD, yesterday warned that a vote by the U.K. toleave the EU would cause a "severe negative shock" to the economy andweaken the country's GDP growth "for many years." The OECD said aBrexit would immediately hit confidence and raise uncertainty, which wouldresult in GDP being 3% lower by 2020.

*Bank of Ireland said this morning that it continues to trade in line withexpectations, with net interest income recorded in the first quarter meetingthe bank's expectations. Regulatory charges and levies of approximately €50million were accounted for during the period.

GERMANY,SWITZERLAND AND AUSTRIA

DeutscheBank hit by declining client activity in Q1: today reportedfirst-quarter net profitattributable to shareholders of €214 million, down from €544 million a yearago. Co-CEO John Cryan said challenges in the financial markets led to a declinein client activity in the capital markets, resulting in a year-over-year dropin the bank's revenues, most notably in its trading and corporate financebusinesses. Meanwhile, Co-CEOJürgen Fitschen tellsBild that he expects the large number of lawsuits against the bank todiminish over the coming months. "Important cases" should be closedby year-end and the bank "needs to try its best" to avoid legalconflicts in the future, Fitschen said.

*Munich Re CEO Nikolausvon Bomhard at yesterday's annual shareholders meeting said first-quarterprofit will be lower than expected, mainly owing to equity investmentwrite-downs, Handelsblatt reports.He said, however, that the "very ambitious" full-year profit targetof between €2.3 billion and €2.8 billion remains unchanged and the dividendwill be "stable."

*Zeno Staub, CEO of VontobelHolding AG, tellsHandelszeitung that the bank plans to grow its private banking unitthrough domestic acquisitions, but is working on diversifying the assetmanagement unit whose head, Rajiv Jain, recently quit.

*Some Italian clients of CreditSuisse Group AG are suing the bank for allegedly not advising themon risks associated with life insurance policies issued by a Credit Suissesubsidiary in Bermuda, Handelszeitung writes.Italian tax authorities suspect that the bank hid untaxed money of Italianclients in life insurance policies, so-called insurance wrappers, andtransferred it to the offshore haven. Finews.ch also has a report.

*Wolfgang Kindl, CEO of UNIQA International Versicherungs-Holding AG, theinternational unit of UNIQAInsurance Group AG, said the unit, which operates in 15 countries,is mulling over acquisitions, Der Standard writes.Kurier also reports.

*ERGO Group AG openeda branchin France where it wants to sell insurance policies for corporate customers.

*Heta Asset ResolutionAG posted a 2015 lossof €496 million, compared to the year-ago loss of €7.4 billion. In 2016, Hetaexpects to return to positive territory.

*Zurich Insurance GroupLtd. received regulatory approval for the full takeover ofMalaysia's MAA Takaful, Reuters reports.

*Georg Fahrenschon, president of the German Savings Banks Association,criticized the ECB's interest rate policy and said it put savings banks andbuilding societies under "the most" pressure, Handelsblatt reports.He added that savings banks will not be able to shield retail clients fromnegative interest rates indefinitely, Focus Online writes.

*German Finance Minister Wolfgang Schäuble wants banks to report to taxauthorities if they organize offshore activity for their customers, andtaxpayers should be obliged to inform the tax office if they have founded orobtained shares in offshore firms, Frankfurter Allgemeine Zeitung reports.

*Prosecutors in Cologne brought charges against Georg Baron von Ullmann, formerchairman of the board of Sal.Oppenheim jr. & Cie. AG & Co. KGaA, accusing him ofembezzlement in connection with the bank's acquisition of an office building inFrankfurt in 2008, Handelsblatt writes.

FRANCEAND BENELUX

EFG set to take some of UBILuxembourg biz:EFG International AG said this morning that it agreed to acquire the Luxembourg-basedprivate banking activities of Unione di Banche Italiane SpA unit , withapproximately €3.6 billion in client assets. The transaction is structured as a cash acquisition and isexpected to be completed during the first half of 2017.

*Barclays Plc andAnaCap Financial PartnersLLP entered into exclusive discussions regarding the potential sale of the Britishbank's French retail banking operations to AnaCap.

* Incoming AXA CEO Thomas Buberl will present the company's newstrategic plan June 21, ahead of his officially taking over the CEO role inSeptember, Les Echos writes.

* Crédit AgricoleSA's LCL network, formerly Crédit Lyonnais SA, is being shaken up by new CEO MichelMathieu, after the unit was singled out for poor performance during thepresentation of the company's new strategic plan, Les Echos writes.An email to staff warns of cost cutting and structural reform, includingbringing the private banking division closer to the business and institutionaldivision.

* AgeasSA/NV's annual meeting was again dominated by the Fortis SA issue, L'Echo writes,with shareholders being told that it will take at least 18 months for the €1.2billion settlement with Fortis shareholders, announced in March, to come intoeffect. One shareholder activist claimed that Ageas had been tricked byBNP Paribas SA intothe settlement and said he would take BNP Paribas to court.

* Meanwhile, De Tijd writesthat the recent attacks in Brussels will cost Ageas several tens of millions ofeuros. At the shareholders meeting yesterday, Ageas said it expects AGInsurance has to pay approximately €30 million and unit Interparking has todeal with sharply declining revenues at Zaventem airport and in Brussels.

SOUTHERNEUROPE

BBVA, CaixaBank Q1 profitslower YOY:Banco Bilbao Vizcaya ArgentariaSA today reported a year-over-year drop in first-quarternet attributable profit to €709 million from €1.54 billion, while reported first-quarter profit attributableto the group of €273 million, compared to €375 million a year earlier.

*Intesa Sanpaolo SpAis in final discussions to sell its payments subsidiary Setefi to , or ICBPI, insiders tell Reuters. Advent and Bain Capital, the owners of ICBPI, bid higherthan Italian payment services firm SIA in a deal worth more than €1 billion. Adeal could be finalized in the coming days.

* Ina bid to encourage the sudden demand from retail investors, extendedthe deadline of its capital increase by 24 hours to April 29, MF writes.

*Luciano Camagni left his post as co-director general of to joinBanco di Desio e della BrianzaSpA as director general, MFwrites.

*Intesa Sanpaolo at its shareholders' meeting confirmed its dividend targets to2018 and confirmed Gian Maria Gros Pietro as chairman of the lender's board ofdirectors under the unitary governance structure, all dailies including MF report.BloombergNews also covers.

* UnipolSaiAssicurazioni SpA CEO Carlo Cimbri was named chairman while MatteoLaterza was appointed director general and Pierluigi Stefanini and FabioCerchiai vice presidents, MF writes,adding that the insurer will present a new business plan May 13. Il Sole 24 Ore adds that UnipolSai has a stake of closeto 2% in both Banco PopolareSocietà Cooperativa and Banca Popolare dell'Emilia Romagna SC in a bid topreserve its bancassurance deals with the lenders.

*The Bank of Italy approved the incorporation of Azimut Consulenza Sim intoAzimut Capital Management Sgr in a bid to streamline the company by integratingthe production and distribution businesses of , Il Sole 24 Ore writes. The company had said thatwithout an approval by today's shareholders' meeting it would have askedshareholders to deliberate on the move of its headquarters abroad.

* At a parliamentary session, Banco de PortugalGovernor Carlos Costa argued that interest rates for mortgage loans should notgo below zero, Publicó reports.

* Elisa Ferreira, member of theEuropean Parliament, and Luís Máximo dos Santos, president of , have beenformally presented at the Portuguese parliament as prospective members of theboard of directors of the country's central bank, Expresso reports.

* Deposits at Greek banks fell to €121.5 billionin March from €121.7 billion in the previous month, when compared to ayear-ago, deposits dropped 12.3%, Imerisiasays.

NORDICCOUNTRIES

Big 4 Swedish banks under NYDFS probe:The four largest Swedish banks — Nordea Bank AB (publ), ,Skandinaviska Enskilda BankenAB and Swedbank AB(publ) — are being investigated by the New York Department ofFinancial Services for their alleged involvement with Panama-based law firmMossack Fonseca, Svenska Dagbladet reports.The probe may lead to the banks losing their licenses in New York.

*Nordea, meanwhile, admitted to having trouble complying with legislation oninvestment advice and money laundering, and warned that it might be fined byauthorities, Realtid reports.

*Jyske Bank A/S today reported first-quarter net profit of384 million Danish kroner, compared to 393 million kroner in the year-agoperiod.

*DNB ASA reportedunaudited group first-quarter profitattributable to shareholders of 5.11 billion Norwegian kroner, down from 6.52billion kroner in the year-ago period.

*Totalkredit A/S saidit expects to lose thousands of customers and billions of kroner of loansfollowing its decision to raise prices, BerlingskeBusiness reports.The Nykredit RealkreditA/S subsidiary expects Jyske Bank alone to take over loans of asmuch as 20 billion Danish kroner.

*Two former employees of Amagerbanken A/S have been acquitted of charges ofserious fraud and insider trading, Finansreports,adding that the customer accused of providing to the two executives insideknowledge about a possible acquisition in 2010, has also been acquitted.

EASTERNEUROPE

Goldman positive about Turkish banks' Q1results: Theoutlook for first-quarter profit in the Turkish banking sector looks positive,however, structural problems remain, according to a Goldman Sachs report citedby Business HT. In the face of possible pressures in the banking sector in themedium term, lenders that take have better capital positions, loan quality,funding composition and cost efficiency will benefit.

*Türkiye Garanti BankasiAS yesterday reported first-quarter net profit of1.04 billion Turkish lira, compared to 862.4 million lira in the year-agoperiod.

*Türkiye Vakiflar BankasiTAO issued Turkey's first euro-denominated MBS. The coupon for the5-year €500 million issuance was set at 2.375%, Anadolu Agency notes. The issueattracted €3.2 billion of interest.

* B&N Bank(PJSC) sold bailed-out unit Rost Bank to one of its mainshareholders, Mikail Shishkhanov, in December 2015, a move that helped thelender avoid losses and preserve capital, Vedomostireports,citing B&N Bank's IFRS report for 2015.

* Russian businessman Vladimir Kogan, who took over following its2015 financial recovery program, is in discussions with the Russian centralbank to obtain additional financial resources for the lender'sbailout, Kommersant reports.

* Bank Zachodni WBKSA paid 67.6 million Polish zlotys in the first quarter under therecently introduced asset tax, compared with 75 million zlotys estimatedearlier by analysts, Rzeczpospolita reports.The asset tax to be paid by the lender for 2016 is estimated at 335 millionzlotys. Separately, Parkiet saysthe bank is close to appointing a new management board chairman, with theselection process to be completed in the first half.

* The European Bankfor Reconstruction & Development intends to invest up to €700million in Poland this year, including in a project aimed to revive the WarsawStock Exchange, whose market capitalization fell by 26% year over year andreached 1 trillion zlotys at the end of March, Reuters reports.

* The shares of Czech lender GE Money Bank a.s., whose name will soon be changed toMONETA Money Bank, will start trading on the Prague Stock Exchange on May 6,E15 reports.

INOTHER PARTS OF THE WORLD

* Following his release from house arrest, former CEO AndréEsteves told employees at the bank's headquarters in São Paulo that he will bereturning to thecompany, although his exact role is unclear, Bloomberg News reports. Althoughit is unlikely that Esteves will become CEO again in the near future, he couldassume a leading advisory position.

* BancoGerador SA is preparing to submit to Banco Central do Brasil aproposal for its sale to another financial institution, Valor Econômico reports.The proposal includes a corporate and operational restructuring of BancoGerador, which has had an inadequate solvency ratio for the last two years.

* The nonperforming loans ratios and the balance ofnonperforming loans of the 14 listed Chinese banks rose in 2015, with variousbanks' NPL balance growing more than 50% year over year, Phoenix Finance reports.

* AmericanExpress Co. will launch Samsung Pay in Australia soon, followingApple Pay's successful entry into the country, ZDNet reports.

NOWFEATURED ON SNL

Barclays to'adjust' i-bankers' bonuses amid drive to improve returns:First-quarter figures were better than expected in the corporate and investmentbank, but management stressed the importance of driving down costs to improvereturns.

Santanderexecs optimistic about Brazil unit: Difficulties faced by thedivision are down to currency fluctuations and do not reflect a drop inBrazilian real-denominated earnings, which are expected to remain stable oreven improve in 2017, executives said.

SCOR CEO warnsof tough times ahead, but sticks to business plan: Denis Kesslersaid the company would achieve the targets in its current business plan despitefierce competition and a tough environment with extremely low interest rates.

Nordea to'catch up' on compliance as Panama investigations begin: Nordea isexpanding its compliance department at considerable cost, as an investigationseeks to reveal whether the bank breached any laws in using offshore structuresfor clients.

XanaKakoty, Arno Maierbrugger, Brian McCulloch, Kees Pijnappels, Yael Schrage,Praxilla Trabattoni, Mariana Aldano, Mike Hatzidakis, Esben Svendsen, BeataFojcik and Ali Kayalar contributed to this report.

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