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Deutsche warns of headwinds; Cboe to acquire EuroCCP; Kazakh banks to get aid


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Deutsche warns of headwinds; Cboe to acquire EuroCCP; Kazakh banks to get aid

* Major European lenders face more revenue pressure in 2020 due to continued low interest rates and the weak outlook for GDP growth, according to Fitch Ratings.

* Global banks are making the most progress in the transition from the London interbank offered rate due to their greater contact with regulators, higher resources and experience in adjusting operations for other systemic changes, The Wall Street Journal reported, citing a study by law firm Cadwalader, Wickersham & Taft and consulting firm Sia Partners.

* German Finance Minister Olaf Scholz has prepared a draft law introducing a financial transaction tax in ten EU countries, which would apply to anyone purchasing shares in large companies, Reuters reported, citing Süddeutsche Zeitung.

* Parliamentarians from Italy's 5-Star Movement and Democratic Party rejected so-called single limb collective clauses aimed at making debt restructuring easier for countries seeking a bailout under the EU's bailout fund, Reuters reported, citing a draft resolution. Meanwhile, Italian Economy Minister Roberto Gualtieri warned that a proposal to force European banks to risk-weight their holdings of government bonds would be "damaging and inopportune" but added that that the country is open to discussing incentives to diversify such holdings, Reuters wrote.


* HSBC Holdings PLC is set to start talks with French and foreign banks interested in a potential sale of part or all of its French retail banking unit, an insider told The Business Times, confirming a Les Echos report. The bank could reportedly make a decision on whether to sell or restructure the unit by April next year.

* Santander UK PLC CEO Nathan Bostock will see his pension allowance cut by more than £400,000 over the next two years, insiders told the Financial Times. Bostock, who currently receives a cash lump sum worth 35% of his base salary instead of a traditional pension, will reportedly see his package reduced to 22% of salary in 2020 and 9% in 2021.

* Lloyd's of London has raised £300 million of senior debt to fund an overhaul in line with its previously announced plan to modernize the business, the Financial Times reported. The company said it will release funding in stages for the overhaul, which is expected to be implemented over several years and will be headed by COO Jennifer Rigby.

* Tough regulations imposed by the U.K. Financial Conduct Authority on peer-to-peer lenders took effect yesterday, Reuters wrote, adding that analysts expect the changes to slow the inflow of funds and result in the closure of some platforms.


* Deutsche Bank AG today confirmed its target of 8% after-tax return on tangible equity in 2022, but acknowledged that the goal has "become more ambitious given external headwinds," particularly lower interest rates in the euro area. The German lender, which noted the "solid progress" it made on its transformation, said it expects the interest rate environment to primarily impact the outlook for returns in its private bank and corporate bank in the midterm, but that revenue growth from its investment bank is expected to partially offset the impact.

* Meanwhile, the ECB reduced Deutsche Bank's common equity Tier 1 ratio requirement to 11.59% from 11.84%, effective from the start of 2020. The central bank also set the German lender's Tier 1 capital ratio requirement at 13.09% and its total capital ratio requirement at 15.09%, with all requirements on a phased-in basis.

* Deutsche Bank plans to merge DB Privat- und Firmenkundenbank AG, the legal entity that runs its domestic retail banking operations, into the group structure, insiders told the Financial Times. The move, which Deutsche is expected to announce today, is said to be part of the lender's aim of slashing about €100 million in annual costs.

* Former Credit Suisse Group AG banker Vadim Benyatov, who was found guilty of espionage following his 2006 arrest in Romania while working for the Swiss lender on privatizing state utility companies, is suing the bank for £68 million, Bloomberg News wrote. Benyatov claimed that Credit Suisse failed to assist him during nine years of legal proceedings.

* A new article in the Financial Times alleged that German payment processing firm Wirecard AG boosted its 2017 cash reserves by including €334 million held in "trustee accounts" of the company's partner firm Al Alam Solution Provider FZ LLC in Dubai. Meanwhile, Germany's financial market supervisory authority BaFin is looking into potential shortcomings of Wirecard's financial communication and whether market manipulation may have been a result of incorrect or misleading information or retention of ad-hoc disclosures, according to Handelsblatt.

* Rainer Neske, CEO of Landesbank Baden-Württemberg, told Stuttgarter Zeitung that he does not rule out negative interest rates for private customers of its subsidiary Baden-Württembergische Bank AG in the future.

* Swiss asset manager Vontobel Holding AG unveiled plans to exit its pure capital markets business, in a move that will see it offload its equity brokerage activities to Zürcher Kantonalbank.

* GAM Holding AG's head of fixed income and foreign exchange trading, Christopher Jarman, is leaving the company, an insider told Financial News. The move is the latest in a string of senior departures at the Swiss asset manager since it appointed a new CEO in September.


* French markets regulator AMF fined U.S. bank Morgan Stanley €20 million related to the manipulation of French and Belgian bond prices in June 2015, Reuters wrote.

* U.S.-based exchange holding company Cboe Global Markets Inc. agreed to acquire Dutch equities clearing house European Central Counterparty NV for an undisclosed sum as part of efforts to develop its equity derivatives trading and clearing capabilities in Europe. Cboe Global Markets said that while the deal and its plan to expand will likely generate positive long-term financial returns, the moves are expected to be dilutive to earnings over the next three to four years.

* Unions at ING Groep NV are planning to go on strike to protest the bank's poor IT services and branch closures which they claim are outside engagements taken by ING during its reorganization in 2016, according to L'Echo. Meanwhile, ING is struggling with its role as co-financier of a controversial coal-fired power station in Indonesia, Het Financieele Dagblad reported. The contractor is embroiled in a corruption scandal and NGOs are calling on the bank to abandon the project.


* An independent committee of Portuguese legal experts said it found evidence of mis-selling of debt securities by failed lenders Banif-Banco Internacional do Funchal SA and Banco Espírito Santo SA, Lusa news agency reported. As part of an assessment, some 3,000 former retail investors of the banks claiming €600 million in losses were considered eligible for a credit recovery program, Jornal de Negócios wrote.

* Portugal's central bank reiterated that the country's banks will not be authorized to charge large companies for holding deposits and will only be allowed to levy fees on deposits held by financial customers such as pension funds, insurers or other banks, Lusa reported. In contrast to other European countries, banks in Portugal are not allowed to charge negative interest on deposits held by non-financial entities.


* Banca Popolare di Bari SCpA CEO Vincenzo De Bustis told Corriere della Sera that the bank needs an immediate capital increase of between €800 million to €1 billion in order to continue functioning. He added that the agenda of a board meeting on Thursday will include starting a liability action against the bank's former managers from the past three to four years.


* Swedbank AB (publ) CEO Jens Henriksson has commissioned an external financial consultancy to carry out a cultural assessment of the lender beginning February to determine why it has faced several "existential crises" over the last 30 years, according to an internal blog post seen by the Financial Times. The bank is facing multiple investigations for its alleged role in the Baltic money laundering case.

* Norwegian insurer Storebrand ASA has divested all stakes owned by its Swedish unit, SPP Fonder AB, in firms that produce or distribute fossil fuel energy sources, as well as related companies such as oil service suppliers. In an emailed statement to Bloomberg, Storebrand said it sold 9 billion kronor worth of shares in the firms over the past few weeks to comply with new rules.

* Finland's Sanna Marin is set to become the world's youngest serving prime minister after the Social Democratic Party elected her as head of the country's ruling coalition government, the Financial Times reported.


* The Kazakh government is looking to provide more than $1 billion to bail out at least four local lenders after an asset quality review found that the banks needed extra capital to write off bad loans, insiders told Reuters. The new aid package could reportedly be worth up to 1 trillion tenge.

* Kazakhstan's central bank kept base interest rate unchanged for a second consecutive time at 9.25%, but warned that inflation could accelerate to the higher end of its target range in the first quarter of 2020 due to mounting food prices and higher tariffs on services, Bloomberg wrote.

* Turkish President Recep Tayyip Erdoğan told state broadcaster TRT Haber that the country will achieve single-digit interest rates and inflation in 2020, Reuters wrote. Since July, the country's central bank has slashed its interest rate by 10 percentage points to 14%.

* State-owned lender Türkiye Halk Bankası AŞ was threatened by a U.S. judge with contempt and potential fines over the bank's refusal to acknowledge sanctions evasions charges filed against it, Bloomberg reported.

* The three co-founders of Russia-based Modulbank JSC Commercial Bank Modulbank, each owning 7.5% of the lender, agreed to sell their stakes, with the transaction to take place in December, Vedomosti reported. The shares are likely to be purchased by Russian businessman Artem Avetisyan, who owns over 68% of Modulbank and also controls Public Stock Co. Orient Express Bank with his business partners.

* VTB Bank PJSC created an IT platform to combine consumer and banking services and will invest 2.5 billion rubles into its development, RBC reported.

* Bank Pekao SA will start working on new strategy during the first months of 2020 and will strive to reach its return on equity target of 12.5% in the shortest time possible, the lender's acting head Marek Lusztyn told news agency PAP.

* The Bank of Lithuania said it expects to release the world's first blockchain-based digital collector coin in spring 2020, adding that the project will adapt and test blockchain-based services in the financial sector.


Asia-Pacific: Bank Mandiri names new head; Australia OKs IOOF acquistion bid

Middle East & Africa: Moody's revises outlook on African banks; Banco de Fomento Angola Q3 profit down

Latin America: New Argentine economy minister, central bank chief; Gilinski eyes bank launch

North America: FAIR Plan change opposed; PG&E settlement; UnitedHealth pharmacy deal

Global Insurance: Truist completes merger; SEC rejects NYSE's direct listing plan


Climate policy could wipe $2.3 trillion off global companies: UN-backed group: Investors need to update their strategies to reflect transition policy risks that could cut valuations between $1.6 trillion to $2.3 trillion by 2025, according to research conducted for the Principles for Responsible Investment network.

Fed repo market intervention was highly significant, BIS says: The Bank for International Settlements' quarterly review highlights the U.S. Federal Reserve's multibillion dollar intervention in the repo market as an event of significance well beyond the short-term market dislocation that prompted it.

Deza Mones, Arno Maierbrugger, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Yael Schrage, Brian McCulloch, Praxilla Trabattoni and Helen Popper contributed to this report.

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