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In This List

Dutch banks need €3B; Woodford fund shut down; Italy may cut bank loss tax help

StreetTalk – Episode 70: Banks' Liquidity Conundrum Could Fuel M&A Activity

Street Talk Episode 70 - Banks' Liquidity Conundrum Could Fuel M&A Activity

StreetTalk – Episode 69: Banks left with pockets full of cash and few places to go

Street Talk – Episode 69: Banks left with pockets full of cash and few places to go


Dutch banks need €3B; Woodford fund shut down; Italy may cut bank loss tax help

* The Finnish prime minister and holder of the rotating EU presidency said last night that more time was needed to secure a Brexit deal, raising the prospect of negotiations extending beyond this week's Brexit summit, the Financial Times reported.

* Twenty-eight of the world's largest banks, including UniCredit SpA and Commerzbank AG, have not endorsed the Task Force on Climate-related Financial Disclosures, an organization to develop voluntary, consistent climate-related financial risk disclosures for use by companies.

UK AND IRELAND

* The suspended LF Woodford Equity Income Fund is to be shut down, and investors' money returned as soon as possible, according to the fund's administrator.

* Bank of England Deputy Governor Dave Ramsden said the "entrenched uncertainty" stemming from Brexit that is weighing on U.K. economic growth may hinder the central bank from further easing monetary policy.

* Meanwhile, Bank of England Deputy Governor for Financial Stability Jon Cunliffe said a prolonged low-interest-rate environment may make economic downturns more severe and weaken the resilience of the financial sector.

* The U.K. Financial Conduct Authority plans to ban the way some motor finance brokers receive commission. Some brokers receive commission linked to the interest rate that customers pay, and the broker can set that rate, which may lead to brokers acting against customers' interests, the regulator said.

* Banco de Sabadell SA's U.K. unit TSB Bank PLC is likely to present a new strategic plan by November-end, Reuters reported, citing Sabadell CEO Jaime Guardiola.

* Tesco PLC, which owns a 49.90% stake in Tesco Underwriting Ltd. through Tesco Personal Finance PLC, plans to buy out the 50.10% stake in the insurer held by Ageas SA/NV, Post reported.

* MS Amlin PLC ceased underwriting aviation insurance renewals or new business, effective Oct. 14, confirming its exit from the aviation insurance market.

* UK Finance, a U.K. trade body, appointed Susan Allen, head of U.K. retail and business banking at Banco Santander SA, and Charlotte Hogg, executive vice president and CEO of Visa Europe Limited, to the board, City A.M. reported.

* Bank of Ireland Group PLC CFO and executive director Andrew Keating will step down Oct. 18. The group appointed Myles O'Grady to succeed Keating, subject to regulatory approval. O'Grady joined the group as director of commercial partnering Ireland in June 2019.

GERMANY, SWITZERLAND AND AUSTRIA

* Deutsche Bank AG reportedly paid millions of dollars to Chinese consultants to gain access to powerful politicians and managers in China, hired scores of relatives of influential ruling party member and distributed valuable gifts to senior cadres when it entered the Chinese market nearly two decades ago in order to gain advantage over competitors, an investigation by The New York Times, WDR and Süddeutsche Zeitung found.

* The public prosecution in Cologne has launched an investigation into the alleged involvement of two "responsible persons" at former HSH Nordbank AG in illicit cum-ex dividend deals, Handelsblatt wrote. HSH Nordbank was renamed Hamburg Commercial Bank AG in February.

* Marcus Schenck, former investment bank chief of Deutsche Bank, is setting up the first German branch of U.S. financial firm Perella Weinberg Partners LP. The Munich-based unit will open Dec. 1 and will employ 10 to 15 people.

* A survey by consultancy EY among 120 German banks has shown that one in six is planning to increase service fees this year or has already done so.

* CS Victims, a group of clients of Credit Suisse Group AG's wealth management unit, reiterated its demand for the bank to return commissions and fees believed to amount to more than $150 million paid "as a result of illegal activity which proper systems and controls should have prevented." The group consists of Eastern European oligarchs defrauded by former Credit Suisse client adviser Patrice Lescaudron between 2009 and 2015, Finews noted. Lescaudron got a five-year jail term for abusing the trust of clients and fraud.

FRANCE AND BENELUX

* Dutch banks will need about €3 billion in additional capital to backstop their mortgage loan portfolios, as a result of a new floor for mortgage risk weighting introduced by the Dutch central bank.

* AXA Investment Managers SA CEO Andrea Rossi and Chairman Christof Kutscher have decided to leave their roles. AXA SA Group CFO and Group Deputy CEO Gérald Harlin will serve as Axa Investment Managers' executive chairman starting Dec. 1. He also assumes the role of chairman of the asset management unit's board as of Oct. 14.

* France-based Société Générale SA called off its plan for a securities joint venture in China in favor of a wholly owned subsidiary in an effort to avoid future stake transfers. The move comes as Chinese regulators announced plans to lift foreign ownership limits in its financial industry by the end of 2020.

SPAIN AND PORTUGAL

* Portugal's Novo Banco SA concluded the sale of its life insurance business GNB Companhia de Seguros de Vida to an entity owned by funds advised by Apax Partners for 168 million. Dinheiro Vivo and Jornal de Negócios carry reports on this.

* Portugal's Caixa Geral de Depósitos SA concluded the sale of its Spanish unit, Banco Caixa Geral, to Spain's Abanca for 364 million, Jornal de Negócios reported, citing a securities filing by the state-run lender.

* José Antonio Álvarez, the CEO of Banco Santander, has said the bank is not going to play the "mergers game" in Spain at a time when others are considering it, reported Expansión. He also said the entity had ruled out international merges in the near future as these face considerable regulatory obstacles.

ITALY, GREECE AND MALTA

* Italy is considering reducing the amount of loan losses that banks can deduct from their taxable income next year, Reuters cited two sources close to the matter as saying.

* Italian loan recovery specialist doValue SpA has reached an agreement with Alpha Bank AE to manage gross €4.3 billion worth of nonperforming loans and real estate assets portfolio in Cyprus, Reuters reported. DoValue will also manage the Greece-based bank's future nonperforming loans and real estate assets in the country.

* Italy-based UniCredit will only charge negative rates on clients with more than €1 million in deposits, Reuters reported. The bank was clarifying earlier comments by its CEO who said the company would apply negative rates to those with more than €100,000 in deposits. The rates will apply from 2020.

* Meanwhile UniCredit has told the ECB it may create a holding company in Germany for part of its business, insiders told Bloomberg News. This could help it reduce funding costs.

* Massimo Tononi could step down as chairman and CEO of Cassa depositi e prestiti SpA as soon as Oct. 24 or Oct. 25 with Andrea Beltratti, former chairman of the management board of Intesa Sanpaolo SpA and professor at Bocconi University, in pole position to succeed him, MF reported. Il Sole 24 Ore also covered this.

* Iccrea Holding SpA and Cassa Centrale Banca have found an agreement to solve their legal dispute, with Iccrea committing to finding a buyer for the 22% stake CCB has in Iccrea that is worth €240 million, MF reported. Il Sole 24 Ore added that CCB will sell an initial 10% at the beginning of next year and the rest over three years.

* Cassa Centrale Banca has agreed to sell to Britain's Arrow Global €345 million in bad loans, Reuters wrote.

NORDIC COUNTRIES

* Deutsche Bank reported 1 million suspect money transfers with Danske Bank A/S to authorities about five years after a whistleblower flagged suspicious transactions at the Danish bank, insiders told Reuters. Prosecutors are probing into whether staff or management sanctioned the transactions, and whether they subsequently tried to cover them up.

* U.S. insurance broker Arthur J. Gallagher & Co. has acquired Swedish broker Proinova. Financial terms of the deal were not announced.

EASTERN EUROPE

* An appeal court in Warsaw ruled in a Swiss franc mortgage case launched by the clients of Getin Noble Bank SA that a CHF indexation clause included in the clients' mortgage agreement with the lender is illegal, but the agreement itself remains valid, Rzeczpospolita reported. The bank will have to return to its clients funds collected in Swiss francs, and the loan that is subject to the ruling will be converted into Polish zlotys. However, the court did not determine the interest rate that would be calculated on the converted loan, the newspaper noted.

* The Russian central bank plans to decrease the regulatory burden on local banks and reduce the scope of reporting information they have to publish or provide to the regulator, Kommersant reported, noting, however, that the measures are unlikely to bring any tangible economic benefits to financial institutions.

* Russian financial group BCS increased the capital of its unit JSC «BCS Bank» by 2.3 billion Russian rubles to 8.2 billion rubles, having acquired additional shares issued by the lender, Vedomosti reported. The bank plans to use the funds from its shareholder to boost its corporate loan portfolio and launch digital lending.

* ING Groep NV unit ING Bank Śląski SA is considering the purchase of Commerzbank's Polish unit mBank SA and is putting together a team of specialists to analyze the potential acquisition, Rzeczpospolita reported. If carried out, the deal would result in the creation of the second biggest bank on the Polish market, just behind state-controlled PKO Bank Polski SA.

* Moody's revised the outlook on the Czech Republic's banking sector to stable from positive, citing a slowing GDP growth and its expectation that the country's banks will deliver steady performance during the next 12 to 18 months. Although Czech lenders' loan quality is among the best in Central and Eastern Europe region, it will weaken moderately after several years of rapid loan growth, the ratings agency noted.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: HK regulator slashes bank buffers; ASIC to clamp down on financial products

Middle East & Africa: Mashreqbank gets new chairman, CEO; Absa's CIB unit eyes China office

Latin America: 7 banks in hot water for Mexico bond market manipulation; Banco XP gets license

North America: Facebook's Libra loses backers; California CUs call off proposed merger

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Negative bond yields could mean short-term pain, long-term gain for Greek banks: As Greece becomes the latest European country to issue government bonds with a negative yield, Scope Ratings speculates that this development could spell short-term profit losses but some indirect gains in the long term for Greek banks.

EU bank rescue agency mulls bond issues, guarantees to end liquidity dilemma: The European agency in charge of rescuing failing banks could issue its own bonds or provide guarantees to the ECB to ensure continuing liquidity for a lender placed in resolution.

Ben Meggeson, Arno Maierbrugger, Danielle Rossingh, Gerard O'Dwyer, Beata Fojcik, Yael Schrage, Stephanie Salti, Sophie Davies and Helen Popper contributed to this report.

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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.