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Co-op eyes debt/equity swap; Allfunds sale OK; MPS in bad loan sale talks

* ECB President Mario Draghi told European Parliament lawmakers in Brussels yesterday that it is "crucial" for the regulator to at least maintain the current level of oversight it has over the clearing of euro-denominated trades after the U.K. leaves the EU in order to ensure the euro's stability, Bloomberg News reported. His statement came after ECB Governing Council member François Villeroy de Galhau repeated calls to have euro-denominated clearing in countries covered by eurosystem supervision, adding that he did not see how clearing could take place in London post-Brexit. Reuters also covered.

* Separately, Draghi said the ECB remains convinced that its ultraloose monetary policy is still necessary despite the resurgence of economic growth in the eurozone as the upswing may not be sustainable, The Daily Telegraph wrote. Deutsche Bundesbank President Jens Weidmann, meanwhile, said the ECB's expansive monetary policy is "still appropriate in principle" but that it is legitimate to discuss when to consider monetary policy normalization as inflation recovers, Reuters reported.

* Villeroy de Galhau said the EU must complete its banking union under one EU-wide sector supervisor by outlining simpler rules on bank capital, Reuters reported. He also stressed that the bloc should improve coordination between the single supervisor at the ECB, the European Commission and national regulators, and called for a speedy solution to Italy and Portugal's troubled banks.

UK AND IRELAND

* Co-operative Bank Plc is planning to launch a debt-for-equity swap in a bid to shore up its balance sheet, insiders told the Financial Times. The troubled lender hopes to raise approximately £450 million from the debt-for-equity swap and is aiming to complete the process within two weeks before £400 million of senior bonds mature in September.

* Former Royal Bank of Scotland Group Plc CEO Fred Goodwin looks set to avoid a High Court trial over the bank's ill-fated crisis-era rights issue after RBS reached a legal settlement in principle with the remaining shareholders seeking damages, the Financial Times reported. Most of the investors are believed to have backed the settlement, while those who refuse to accept the bank's 82 pence-per-share offer will have to find funding for the lawsuit to go to trial.

* London Stock Exchange Group Plc agreed to acquire fixed-income analytics platform The Yield Book and index business Citi Fixed Income Indices from Citigroup Inc. for a total cash consideration of $685 million.

* Irish Labour Party leader Brendan Howlin urged the government to postpone Allied Irish Banks Plc's planned IPO until European rules can be amended to allow the proceeds of the flotation to be utilized for capital investment, the Irish Independent reported. Meanwhile, outgoing Irish Finance Minister Michael Noonan said the government will have to make a decision in the coming days on whether to press ahead with the listing or wait for the next window in the autumn.

* The Central Bank of Ireland has fined Bank of Ireland about €3.2 million for "significant failures" in its money-laundering and counter terrorist financing controls.

* Permanent TSB Group Holdings Plc is considering laying off a small number of staff through voluntary redundancies as part of plans to reposition its branch network, according to the Financial Services Union. The bank already briefed its staff last week on its so-called Network 2020 plan. The Irish Times covered.

* Aviva Plc is weighing plans to offer its clients advice on whether to quit their valuable final-salary schemes in exchange for a cash lump sum, one of the most controversial areas of the pensions industry, the Financial Times wrote.

GERMANY, SWITZERLAND AND AUSTRIA

* Norddeutsche Landesbank Girozentrale considers a sale of subsidiary Deutsche Hypothekenbank AG in order to strengthen its capital basis, Süddeutsche Zeitung reported.

* The Monetary Authority of Singapore fined Credit Suisse Group AG S$700,000 for breaches of several money-laundering regulations related to money flows linked to scandal-ridden Malaysian state investment fund 1Malaysia Development Bhd.

* Basil Heeb, CFO and deputy CEO of Notenstein La Roche Privatbank AG, will leave the bank in the coming months after over five years in his role. Christoph Gloor, head of private banking at the bank, was named deputy CEO, while a new CFO has yet to be named.

FRANCE AND BENELUX

* French regulator ACPR urged banks to be on guard against possible sharp rises in interest rates, to ensure the protection of client data shared with fintech platforms and be vigilant against money laundering associated with fintech accounts, Les Echos reported. La Tribune pointed to a clarification by the ACPR over its attitude toward fintech regulation which it said would be proportional, as opposed to the "sandbox" approach used by U.K. regulators.

* Four crowd-sourcing platforms are working with the Caisse des Dépôts et Consignations to develop a blockchain platform for the form of cash certificates created for crowd sourcing, Les Echos reported. L'Agefi also covered.

* Belgian insurer Ethias SA launched a new buyout action of their First life insurance policies, which has been underperforming since 2008, De Tijd reported. The insurer is offering customers a 25% withdrawal bonus if they cancel their contract.

SPAIN AND PORTUGAL

* The European Commission gave Banco Santander SA and Intesa Sanpaolo SpA the green light to sell Allfunds Bank SA to U.S. venture capital fund Hellman & Friedman, Europa Press wrote. The operation "does not raise competition problems" because the activities of the companies involved do not overlap, Brussels said. The deal is worth €1.8 billion.

* Banco Bilbao Vizcaya Argentaria SA will sell its car leasing unit, BBVA Autorenting, to Société Générale SA's ALD Automotive, Expansión reported. The acquisition is part of ALD's preparation for listing on the Paris stock market, Les Echos noted.

* Despite the resistance of some investors, Novo Banco SA will proceed with a €500 million senior bond exchange, details of which will be released in June, Jornal de Negócios said.

* Diego Murillo is to step down from the presidency of life insurance firm AMA Seguros after more than 20 years in the post, Cinco Días reported.

ITALY AND GREECE

* Banca Monte dei Paschi di Siena SpA has entered in exclusive talks with a group of investors and Quaestio Capital Management SGR SpA, which manages the Atlante fund, about the sale of a bad loan portfolio that the lender must divest before it can be taken over by the government. The bank has set a June 28 deadline for the talks. Insiders told Reuters that the investors in talks with the bank are U.S. private equity fund Fortress and Italian bad loan manager Credito Fondiario SpA. The Wall Street Journal also covered. The bank's bad loan portfolio amounted to approximately €26 billion at 2016-end. MF, Il Sole 24 Ore and Il Messaggero all covered.

* Milan magistrates have opened an investigation on Banca Popolare di Vicenza SpA for allegedly obstructing supervision from market watchdog Consob, Corriere della Sera wrote.

* Banca Carige SpA's board will today decide on the sale of the first tranche of NPLs with a GACS guarantee and to discuss a €450 million capital increase, Il Sole 24 Ore reported, noting that the meeting will also be used to reduce the divergence between CEO Guido Bastianini and reference shareholder Vittorio Malacalza. Il Messaggero added that the recapitalization could reach €600 million.

* Meanwhile, Generali does not want to convert its €80 million worth of subordinated Carige bonds into stock, a move that would make the Italian insurer the lender's major shareholder, Il Sole 24 Ore wrote.

* Bank of Cyprus Public Co. Ltd. reported first-quarter profit attributable to owners of the company of €2.2 million, down from €50.2 million in the year-ago period, as net interest income declined year over year to €156.4 million from €184.8 million.

* Greek banks are prepared and have the liquidity to finance sustainable business plans, according to Eurobank Ergasias SA CEO Fokion Karavias, Imerisia reported.

* Data from the Bank of Greece showed that bank deposits of Greece's private sector declined to €118.99 billion in April — the lowest since October 2001 — from €119.31 billion in March, Reuters reported.

NORDIC COUNTRIES

* Nordea Bank AB (publ) has not yet taken a decision about potentially moving its headquarters from Sweden, and no board meeting is scheduled today to announce it, Reuters reported. Media reports had suggested that Nordea would formally decide to shift its headquarters from Sweden today. Realtid also covered.

* Saxo Bank A/S, through Swiss subsidiary Saxo Bank (Switzerland) Ltd. seeks to enter collaborations with Swiss fintech startups to enhance the development capabilities for its "open banking initiative," a project that aims at enabling third-party developers to build applications and services around existing financial institutions, finews.ch wrote.

* Swedish insurance comparison company Pensiono is one step closer to the goal of becoming an insurance company, Breakit reported. The company has raised 41.7 million Swedish kronor in a rights issue done through crowdfunding site Pepins.

EASTERN EUROPE

* The board of directors of oil and gas company TATNEFT has resolved to acquire 5 billion ordinary shares of PAO AK Bars Bank at 1 Russian ruble per share in the course of additional issuance of shares by the bank with the aggregate value of 10 billion rubles. As a result, TATNEFT's total shareholding in the bank will increase to approximately 17.24%.

* The Russian central bank revoked the license of Ivy Bank (JSC) and Petrozavodsk-based International Commercial Bank for Development of Investment and Technology and placed the lenders into provisional administration until the appointment of a receiver or a liquidator. The regulator also revoked the license of Moscow-based Iron Bank at its own request and will appoint a liquidation commission for the lender.

* The shareholders of PJSC BANK JUGRA decided to boost the lender's capital by converting a subordinated deposit worth around $500 million, a move that will help the bank increase its core Tier 1 capital ratio to 13.2%, the lender said.

* Slovenian Finance Minister Mateja Vranicar Erman offered to step down yesterday over the likely delay in the planned sale of Nova Ljubljanska Banka d.d., but Prime Minister Miro Cerar declined to accept her resignation, insiders told Reuters. State-owned Slovenian Sovereign Holding could make a decision on whether to pursue the bank's privatization on Thursday, the sources added.

* The Slovak central bank approved the upcoming merger of Sberbank Slovensko a.s. and Prima banka Slovensko a.s., controlled by investment company Penta, Hospodarske Noviny reported.

* Nasdaq and the Shanghai Stock Exchange could acquire shares of a stock exchange that is being set up in Kazakhstan, Vedomosti reported after the Financial Times.

* RBS has started the liquidation process for its Istanbul branch following the Turkish banking watchdog's approval, Finans Gundem reported. The branch's closure is parallel to RBS' global strategy to refocus on its core markets.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: Alipay extends US partnership; China Minsheng leads pre-IPO round of P2P lender

Middle East & Africa: MedGulf douses sale rumors; Israel, Kenya central banks hold rates

Latin America: New CEO at BNDES; Bancrédito to sell commercial loan portfolio

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

German public banks to show greater resilience than private lenders in 2017: Germany's savings and cooperative banks look better poised than their privately owned counterparts to weather the challenges in the domestic market.

Close German banks, not branches, to achieve meaningful cost cuts, experts say: Achieving a meaningful reduction in costs and higher profitability in the German banking sector demands wholesale consolidation in the industry, on top of branch closures and staff cuts, according to experts.

Sheryl Obejera, Arno Maierbrugger, Meike Wijers, Esben Svendsen, Beata Fojcik, Mike Hatzidakis, Ali Kayalar, Yael Schrage, Brian McCulloch, Sophie Davies and Mariana Aldano contributed to this report.

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