* Italy's bank shares plunged yesterday amid political turbulence and the prospect of another possible general election. Short positions in lenders including UniCredit, Intesa Sanpaolo and UBI reached almost €1.1 billion, MF wrote. Banks in Portugal, Spain and France also saw big share price drops owing to their exposure to Italian government bonds.
* Amid the crisis, eurozone investors pushed ECB rate hike expectations to October 2019 from June 2019, although ECB executive board member Sabine Lautenschläger said rates could rise in mid-2019.
UK AND IRELAND
* Lloyd's of London insurer Neon Underwriting Ltd., the first company to use the U.K.'s new insurance-linked securities regime, is planning to renew its existing deal and hopes to boost its size.
* U.K. Shadow Chancellor John McDonnell urged the British government to force Royal Bank of Scotland Group PLC to halt its plan to shut down 162 branches in England and Wales, The Guardian reported.
* Meanwhile, RBS said it will no longer provide project-specific finance to coal-fired power stations, thermal coal mines, oil sands or Arctic oil projects and unsustainable vegetation or peatland clearance projects. Separately, the bank's CFO, Ewen Stevenson, has stepped down.
* Phoenix Group Holdings will launch a fully underwritten £950 million rights issue to help fund its planned acquisition of Standard Life Assurance Ltd. from Standard Life Aberdeen PLC
* TP Icap PLC Chairman Rupert Robson informed the company's board of his intention to retire, effective Dec. 31.
GERMANY, SWITZERLAND AND AUSTRIA
* U.S.-based GAIN Capital Holdings Inc. agreed to sell its trading foreign exchange platform business GTX ECN to Deutsche Börse AG for $100 million.
* UBS Group AG appointed the former European Commissioner for financial stability, financial services and the capital markets union, Jonathan Hill, as an adviser for matters related to Britain's exit from the EU, the Financial Times reported.
* Deutsche Bank AG's CEO said the bank will have completed most front-office jobs cuts by the end of July, as part of plans to lay off more than 7,000 employees by 2019-end, Bloomberg News reported. Deutsche Bank is set to close its equities research business in Dubai and has laid off eight analysts as part of the move, insiders told Reuters.
* Meanwhile Deutsche's share price fell below the psychologically important threshold of €10 yesterday for the first time since 2016, Handelsblatt reported.
* U.S.-based Silicon Valley Bank is opening a branch in Frankfurt after securing a lending license from German financial regulator BaFin.
* Switzerland's Banque de Commerce et de Placements SA told Reuters that it has suspended new transactions with Iran and has begun winding down activities related to the Middle Eastern country after the U.S. said it would reimpose sanctions on Tehran.
FRANCE AND BENELUX
* A new insurtech firm, Luko, has raised €2 million to begin operations in France, based on the model of U.S. company Lemonade, and partnered with La Parisienne Assurances, Les Echos reported. It promises to deliver household insurance contracts in two minutes for apartment dwellers, and payment of claims in two hours.
ITALY AND GREECE
* Moody's said it was keeping Italy's sovereign credit rating under review for a possible downgrade due to the escalating political crisis following the collapse of two populist parties' efforts to form a coalition government.
* Bank of Cyprus Holdings PLC reported first-quarter unaudited consolidated profit attributable to owners of the company of €43.2 million on a statutory basis, up from €2.2 million in the same period in 2017.
* Greece's Piraeus Bank SA agreed to sell a portfolio of nonperforming exposures to U.S.-based Bain Capital, subject to customary conditions and Greek regulatory approvals.
EASTERN EUROPE
* Russian Prime Minister Dmitry Medvedev said state development bank Vnesheconombank will potentially require a capital injection, with the lender set to become the main vehicle to implement President Vladimir Putin's economic goals, Reuters reported.
* The Investigative Committee of Russia is looking into Otkritie Financial Corp. Bank's pre-bailout transactions with O1 Group, controlled by Russian businessman Boris Mints, Vedomosti reported. The proceedings were launched at the request of Otkritie's current head Mikhail Zadornov.
* NPF-Blagosostoyanie, a pension fund controlled by Russian Railways, is looking for buyers for its leasing unit TransFin-M OJSC and for its affiliate Absolut Bank (PAO), Reuters reported. Sale negotiations have taken place with four potential investors, namely PAO Sberbank of Russia, VTB Bank (PJSC), AO Gazprombank and PJSC State Transport Leasing Co., according to the newswire's sources.
* Bank Rossiysky Capital (JSC) was in breach of regulatory capital ratios as of May 1, Kommersant wrote. To bring its capital to the required level, the lender plans to write off 26.2 billion Russian rubles of subordinated liabilities to its former owner, the Russian Deposit Insurance Agency, according to the newspaper.
* The Polish Financial Supervision Authority allowed Bank Zachodni WBK SA to take over the core business of Deutsche Bank Polska SA, Rzeczpospolita reported.
* The central bank of Kazakhstan suspended the license of JSC Eximbank Kazakhstan and Bank of Astana JSC for a period of three months.
IN OTHER PARTS OF THE WORLD
Asia-Pacific: Ant Financial closes US$10B fundraising; China's Huifu to launch HK IPO in June
Middle East & Africa: More Middle Eastern firms explore M&A; African states to discuss Chinese yuan
Latin America: Brazil currency, stocks drop amid strike; ILC's Q1 profit rises 7.8%
North America: Scotiabank fiscal Q2 profit up; customer data breach at 2 Canadian banks
NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE
Italian bank shares plunge after president vetoes finance minister: Political fears over Italy's place in eurozone have grown as its interim government is expected to fail a vote of confidence. Yet analysts are confident that the contagion risk for other EU periphery economies and their banks is limited.
Data Dispatch EMEA: UAE banks brace for impairment charge, tax impact: Economic growth is expected to pick up in the United Arab Emirates in 2018 but profits at the federation's banks are expected to be impacted by a new VAT regime and the implementation of IFRS 9 accounting standards.
UK insurance-linked securities pioneer Neon set to renew deal: Neon's reinsurance and alternative capital director Mark Gibson says he hopes the new deal will be at least the same size as the existing transaction.
Ben Meggeson, Ed Meza, Danielle Rossingh, Gerard O'Dwyer, Beata Fojcik, Yael Schrage, Brian McCulloch, Praxilla Trabattoni and Helen Popper contributed to this report.
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