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RBS to repurchase government shares; CaixaBank, VTB Bank cut jobs

Banking Essentials Newsletter - November Edition

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RBS to repurchase government shares; CaixaBank, VTB Bank cut jobs

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

Concluded transactions

* Hungary-based OTP Bank Nyrt.'s Bulgarian unit DSK Bank completed the purchase of 99.74% of Bulgaria-based Societe Generale Expressbank AD, as well as other local units of Société Générale SA.

* Norinvest Holding SA unit Banque Cramer & Cie SA bought Lugano, Switzerland-based asset manager A.M.&C. Finance SA.

Deals in the making

* Royal Bank of Scotland Group PLC said it will seek shareholder approval to buy back shares from the U.K. Treasury in off-market deals as part of efforts to facilitate its return to the private sector. The lender is looking to repurchase a maximum of £1.4 billion of shares from the government.

* British challenger bank Atom Bank PLC is looking to hire Citigroup Inc. to advise its board on its business options. The bank's main shareholder Banco Bilbao Vizcaya Argentaria has an option to acquire the remaining shares in the bank.

* Denmark-based Jyske Bank A/S began a sale process of unit Jyske Bank (Gibraltar) Ltd. amid Brexit concerns. The bank has received interest from several "serious buyers."

Job cuts and scaling back

* CaixaBank SA informed unions that it plans to cut 2,157 jobs, or 7.3% of its workforce, as part of its strategic plan to reduce its branch network, according to Expansión. CaixaBank also reportedly plans to have 700 store branches, or advisory hubs, by the end of 2021, up from the projected 600 set out in its plan.

* VTB Bank PJSC cut its London staff to 250 in January from 350 in mid-2017 as it continued to face U.S. and EU sanctions over Russia's involvement in the 2014 Crimean crisis. Some London employees were moved to Frankfurt due to the U.K.'s impending exit from the EU.

* Société Générale SA is weighing whether the Descartes Trading division, which puts shareholder money into risky bets, should be closed after seeing it struggle to generate profits.

* BNP Paribas SA is shutting down its U.S. commodities derivatives desk, following an earlier decision by the French lender to stop financing shale and oil sands projects. Some of the staff will be offered jobs overseas while others will assist with the unwinding of New York positions. The bank will still have commodities desks in the U.K. and Singapore.

Civil and criminal actions

* Deutsche Bank AG launched another internal probe into its role in the money laundering scandal surrounding activities at the Estonian branch of Danske Bank A/S. The bank stands accused of allowing billions of euros of suspicious Russian and ex-Soviet funds to flow through its Estonian branch between 2007 and 2015.

* A former Standard Chartered PLC employee is set to plead guilty to criminal charges in the U.S. for alleged breaches of Iran sanctions. The case relates to a wider probe by U.S. prosecutors into whether StanChart continued to process transactions in U.S. dollars for Iran-controlled entities even after it agreed to pay $667 million in fines for carrying out similar activities in 2012.

* The Ukraine's Deposit Guarantee Fund found that 105 million Ukrainian hryvnia of assets had been removed from JSC VTB BANK's balance sheet before the revocation of its banking license.

* A group of 16 PAO Promsvyazbank bondholders whose debt securities were written off after Russia's central bank bailed out the lender have submitted a complaint with the European Court of Human Rights against the Russian state.

In other news

* PAO Sberbank of Russia expects to launch a crowdfunding platform in the first quarter to help its retail clients lend money to companies.

* Banco Bilbao Vizcaya Argentaria SA is expanding an investigation into media reports that the bank had hired private investigators to spy on executives and government officials who favored an acquisition attempt on the bank in 2004.

* Liechtensteinische Landesbank AG said the expansion of its operations will hit its profits for the full year. The bank expects its net profit to drop 23% to about CHF85 million.

* Lloyds Banking Group PLC received a banking license for its new Berlin-based subsidiary, as part of its plans to protect its business as Brexit inches closer.

* U.K. digital lender Tandem Bank Ltd., a unit of Tandem Money Ltd., intends to list its shares on the stock market over the next three to five years depending on market conditions.

Featured during the week on S&P Global Market Intelligence

SocGen shares slump as bank warns on revenue hit due to market conditions: The revenue warning is likely due to volatility on the financial markets in late 2018, particularly in derivatives, which has also hurt French peer Natixis, according to analysts.

Santander U-turn on CEO shows a lack of clarity in strategy: The Spanish lender's decision not to hire UBS investment banking chief Andrea Orcel sends a confusing message to investors about the bank's strategic objectives.

New EU securitization rules may put brakes on issuance growth in 2019: Issuance on the European securitization market has been on the rise over the past five years but this trend may trail off in 2019 due to uncertainty around new regulations, according to S&P Global Ratings.

Barclays toughens climate change approach, but stops short of exiting tar sands: The British lender will conduct enhanced due diligence on tar sands projects, but stops short of pulling out from the sector, drawing fire from environment groups, which say it is lagging behind peers such as HSBC and BNP Paribas.

Macroeconomic uncertainty trumps Brexit as banks' biggest worry: Most lenders operating in the U.K. see an economic slowdown as a bigger threat to business than the country leaving the EU, a new survey shows, although Brexit remains a key risk that has driven sentiment to long-term lows.