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Swedbank, HSBC lose execs; New ECB rules save banks money; UBS' request rejected


Banking Essentials Newsletter: 7th February Edition

Case Study

A Bank Outsources Data Gathering to Meet Basel III Regulations


Private Markets 360° | Episode 8: Powering the Global Private Markets (with Adam Kansler of S&P Global Market Intelligence)


Banks’ Response to Rising Rates & Liquidity Concerns

Swedbank, HSBC lose execs; New ECB rules save banks money; UBS' request rejected

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

Executive moves

* HSBC Holdings PLC COO Andy Maguire and Chief Risk Officer Marc Moses are set to leave the group as part of a management shakeup as part of interim CEO Noel Quinn's "next phase of the bank."

* Helo Meigas stepped down as chief risk officer of Swedbank AB (publ) amid an organizational reshuffle aimed at simplifying its structure.

In the Courts

* A U.S. federal judge denied UBS Group AG's request to dismiss a U.S. Department of Justice lawsuit accusing the Swiss lender of causing significant losses for investors who bought residential mortgage-backed securities sold before the 2008 financial crisis.

* A former managing director at Credit Suisse Group AG filed a £68 million lawsuit against the lender for allegedly failing to protect him after he was arrested and convicted in Romania on charges of espionage.

* HSBC has settled with the U.S. Justice Department to close an investigation into the role of HSBC Private Bank (Suisse) SA in assisting clients to hide assets to evade taxes. HSBC Private Bank (Suisse) agreed to pay about $192.4 million.

Watchdog Activity

* The Central Bank of the Russian Federation reduced its key rate by 25 basis points to 6.25%, delivering its fifth rate cut in a row, as a slowdown in consumer price growth continued to overshoot projections.

* The ECB raised the minimum capital requirement for ING Groep NV, and the bank must hold a minimum common equity Tier 1 ratio of 11.96% beginning Aug. 1, 2020. The regulator also raised the common equity Tier 1 requirement for Commerzbank AG to 10.63% beginning Jan. 1, 2020.

* Swiss banks UBS Group and Credit Suisse Group AG are resilient and comply with global post-crisis capital requirements but they are still required to submit emergency plans designed to address too-big-to-fail rules by the end of 2019. Their submitted plans will then be assessed by the Swiss Financial Market Supervisory Authority to determine whether the two banks will be able to maintain their systematically crucial operations.


* PAO Sberbank of Russia expects its 2020 net interest margin will drop slightly throughout the year and average between 5.1% and 5.3%, according to the lender's 2020 financial plan. The lender also said that strong capital adequacy levels will allow it to earmark 50% of its 2019 net profit under international financing standards for dividend payments.

* Deutsche Bank AG set a new after-tax return on tangible equity target of more than 9% in 2022 for its core bank, which excludes the capital release unit, while confirming its cost objectives for 2019, 2020 and 2022.

* Credit Suisse expects a return on tangible equity of about 8% in 2019, and its new goals for 2020 include a lower profitability target and a new plan to move away from coal projects.

In other news

* New ECB rules that lower the standards for which bonds count toward a bank's mandatory buffer will result in an average reduction in capital requirements equal to 90 basis points of European banks' core equity Tier 1 requirements.

* Challenger banks in the U.K. have been holding meetings with the Bank of England and the finance ministry in recent months, asking the central bank to lower the minimum requirement for own funds and eligible liabilities for banks with assets of £12 billion to £15 billion. Among the challenger banks in Britain are Virgin Money UK PLC, TSB Banking Group PLC, Metro Bank PLC, Co-operative Bank PLC, Secure Trust Bank PLC and Monzo Bank Ltd.

* Deutsche Bank's weakened position in Europe and globally has made it extremely vulnerable to any market stress, be it because of Deutsche's own issues or economic and geopolitical turmoil. Chairman Paul Achleitner has already said he will not seek another term and has begun looking for a suitable successor. But for some shareholders that is not enough as they continue to lose money.

Featured during the week on S&P Global Market Intelligence

Italian midsize banks make steady progress on NPL reduction: Midsize Italian banks made steady progress in cutting their nonperforming loan ratios between the end of March 2018 and the end of September 2019.

Santander under capital spotlight, needs comfortable cushion, analysts say: The Spanish lender remains under scrutiny for having one of the lowest capital levels among the largest European lenders and will need to work on reassuring the market.

Amid investor scrutiny, Norway's banks future-proof against climate risk: "Climate risk is obviously a long-term risk that the banks will have to be aware of, but it's not an imminent risk."

Digitized euro could prompt complete rethink of banking system: A central bank-issued digital currency could be a bulwark against Facebook's Libra, but it would also have profound implications for the way commercial banks' deposit-taking and payments businesses work.

New rules hasten shake-out in UK P2P market as firms exit retail lending: The U.K.'s peer-to-peer lending space is long overdue a shake-out, and new rules from the Financial Conduct Authority that came into place Dec. 9 should speed up the process.