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Danske profit warning; Saxo to buy BinckBank; UK banks named for RBS switching


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Danske profit warning; Saxo to buy BinckBank; UK banks named for RBS switching

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

Pan-Euro news

* The European Commission charged Deutsche Bank AG, Credit Suisse Group AG, Crédit Agricole SA and another global bank with conspiring to distort competition in the sovereign bond market. The commission can impose fines of up to 10% of a company's annual turnover for breaching EU antitrust rules.

* The aggregate common equity Tier 1 ratios of European banks rose to 14.3% at the end of June from 14.0% a year ago on a fully loaded basis.

* Greece, Cyprus and Bulgaria were the European countries whose banking systems had the highest nonperforming loan ratios at the end of the first half.

Profit warnings

* Danske Bank A/S expects lower results for 2018 amid "challenging" market conditions in the fourth quarter. The revised profit guidance came after Estonian authorities arrested 10 former employees of the bank's local branch in relation to a €200 billion money-laundering scandal.

* Groupe BPCE unit Natixis expects to book a roughly 10% year-over-year decline in fourth-quarter net revenues, driven by the current market turmoil in Asia. Shares in Natixis fell more than 7% on Dec. 19 as investors fretted about the French investment bank's risk management.

* Danish lender Sydbank A/S expects its after-tax profit for full year 2018 to be between 1.15 billion kroner and 1.23 billion kroner, lower than previous guidance of between 1.25 billion kroner and 1.33 billion kroner.


* Denmark's Saxo Bank A/S agreed to acquire Dutch online brokerage BinckBank NV for €6.35 per share in cash. The lenders expect the deal to close in the third quarter of 2019.

* Austria-based Bawag Group AG agreed to acquire 100% of Germany-based BFL Leasing GmbH, a specialty finance company, from BFL Gesellschaft des Bürofachhandels mbH & Co. KG, which is majority-owned by VR-Leasing AG. Financial details of the transaction, which is subject to regulatory approval, were not disclosed.

About bad loans

* Spain's state-controlled Bankia SA will sell bad loans and repossessed property worth about €3.07 billion to two subsidiaries of U.S.-based fund Lone Star North America Acquisitions LP. The book value of the nonperforming loans portfolio is approximately €1.42 billion, whereas the foreclosed asset portfolio is valued at nearly €1.65 billion. The deal is expected to be completed in the second quarter of 2019.

* Norddeutsche Landesbank Girozentrale, or NordLB, is in exclusive negotiations to sell its remaining €3.9 billion portfolio of nonperforming shipping loans to U.S.-based Cerberus Capital Management LP. The deal is subject to NordLB striking a deal to sell a stake in the bank in February 2019 in a bid to strengthen its balance sheet and cover write-downs on the value of any loans it sells.

* Portugal's Novo Banco SA sold a large portion of its nonperforming loans to U.S. private equity firm KKR. The group is said to have paid €1.75 billion, after winning the bid against others including Deutsche Bank and Cerberus Capital Management, Economia Online wrote.

In other news

* A group of 11 banks gained approval to take part in an "incentivized switching scheme" whereby they will take business from Royal Bank of Scotland Group PLC as part of the conditions attached to the latter's financial crisis-era bailout.

* Several British members of Parliament called for Lloyds Banking Group PLC CEO António Horta-Osório to resign over the lender's handling of fraud at HBOS PLC's Reading unit that affected a large number of small-business customers.

* VTB Bank PJSC unit JSC VTB Bank (Georgia) was attacked by hackers, who managed to steal several hundred thousand dollars from the lender, Kommersant reported.

Featured during the week on S&P Global Market Intelligence

Europe's banks trim sovereign bond exposure, reducing 'doom loop' risk: European banks have cut their holdings of sovereign bonds, reducing risks both to the companies themselves and the governments whose debt they hold, figures from the EBA's recent risk assessment show.

Further market disruption likely as central banks return to pre-crisis mode: BIS: The Bank for International Settlements' quarterly review warned of further "bumps in the road" as central banks slim balance sheets and raise interest rates.

Germany, Ireland, Luxembourg top choices for post-Brexit EU financial business: Each of the three countries has attracted interest from at least 18 firms, amid concerns about future access to EU markets after Brexit.

Bank of England holds key interest rate at 0.75% amid Brexit uncertainty: The Monetary Policy Committee also said the monetary policy response to the U.K. exit from the EU will not be automatic and could go in either direction.

S&P Global Ratings: German banks better capitalized, less profitable than peers: German banks are on average better capitalized and better capable of absorbing long-term credit losses than Western European peers, but they are less profitable and efficient, according to S&P Global Ratings.

UK whistleblowers make record number of nonfinancial misconduct reports: A senior Financial Conduct Authority executive, meanwhile, said the regulator might also consider diversity and inclusion when assessing the "fitness and propriety" of senior managers at financial firms.

Erste, RBI shares slide on Romania's surprise bank tax plan: Shares in Austria's two biggest lenders, Erste Group and Raiffeisen Bank International, plummeted after the Romanian government surprised the markets with a new tax plan, which includes a levy on banks. Both banks have big operations in Romania.