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Rabobank in US money-laundering probe; Sberbank mulls yuan issues; new chiefs at Numis

Banking Essentials Newsletter - November Edition

Online Brokerage Space Should Remain Rich Source Of M&A

University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts

Estimating Credit Losses Under COVID-19 and the Post-Crisis Recovery


Rabobank in US money-laundering probe; Sberbank mulls yuan issues; new chiefs at Numis

UKAND IRELAND

Newchiefs at Numis: said today thatOliver Hemsley will stepdown as CEO in the autumn but will remain an executive member of the board.Alex Ham and Ross Mitchinson will become co-CEOs, pending regulatory approvals.Effective July 1, Ham and Mitchinson will join the company's board as executivedirectors.

* RSA Insurance GroupPlc CEO Stephen Hester said the company is now much more valuablefor any new owner in the future, Bloomberg News reports.Hester indicated that RSA's shares have been recovering since last summer, whenan offer from Zurich InsuranceGroup Ltd. for the company fell through following losses at theU.K. firm's general insurance business.

* The British Bankers' Association named Russell Griggs asindependent reviewer of banks' branch closure programs, Sky News reports.Griggs will assess an agreement struck with former U.K. Business SecretaryVince Cable requiring banks such as Barclays Plc, HSBC Holdings Plc and Lloyds Banking Group Plc to review the possible impactof a branch closure before it takes place and to come up with alternativebanking services for affected clients. The agreement triggered criticism from communitycampaigners who argue that it failed to oblige lenders to reduce the number oflocations they plan to vacate or to retain the last remaining branch in a town.

*HSBC's retained earnings, net of $2.1 billion of dividends, generated just 7basis points of risk-weighted assets in the first quarter, the lowest levelsince 2004, Fitch Ratings notes.The agency expects the bank's RWA to continue to rise moderately amid thelender's efforts to deploy liquidity and boost revenue.

* The Irish Bank Officials' Association is rebranding as FinancialServices Union to draw members outside traditional banking, the Irish Independent writes.The group currently has 15,000 members.

GERMANY,SWITZERLAND AND AUSTRIA

GlassLewis picks issues with Deutsche Bank: Glass Lewis and its Germansubsidiary Ivox recommended that Deutsche Bank AG shareholders vote against discharginglarge parts of the executive and supervisory boards and that shareholdersreject a new executive board remuneration proposal, Börsen-Zeitung reports. The shareholder advisory firms also support special audits of the bank'sconsolidated financial statements and reviews of damage claims against the executiveand supervisory boards prior to Deutsche Bank's takeover of .

FRANCEAND BENELUX

Rabobankin US money-laundering probe: A U.S. grand jury is said to be reviewingevidence against Rabobank — now known as Cooperative Rabobank UA — andits current and former officials over alleged lapses that purportedly allowed aMexican drug cartel to launder money, Bloomberg News reports.U.S. prosecutors have already spent three years investigating whetherRabobank's U.S. retail banking unit, Rabobank NA, ignored signs that the carteltransferred money through the bank. De Telegraaf adds that U.S. authorities are assessing the possibility ofpressing charges against individuals.

* 's , and Rabobank putaside extra provisions of €514 million in 2015 for possible claims and fines, Het Financieele Dagblad writes. Rabobank had the largestprovisions, intended for small and medium-sized enterprise derivatives and possibleclaims against its U.S. subsidiary.

*Investment management company BlackRock Inc. has built up a 5.01% stake inDutch insurer Nationale Nederlanden, ABM Financial News reports.

* Société GénéraleSA appointed Nancy Harrington Jones to the newly created role ofchief culture and conduct officer for the Americas, IFR reports.John Fitzgerald will replace Harrington Jones in her current role as humanresources chief for the Americas.

*Société Générale Private Banking is to exit the Bahamas, according to L'Agefi. Thedecision is the result of the bank's strategy to concentrate its privatebanking activities in Europe. Separately, SocGen CEO Frédéric Oudéa said thePanama Papers scandal had no impact on the bank's customers, Les Echos reports.

*Belgian Finance Minister Johan Van Overtveldt has reiterated his opposition tothe so-called Tobin tax on financial transactions, L'Echo writes. The minister said the taxwill lead to financial problems for the EU's member states, according to De Tijd.

SPAINAND PORTUGAL

Portuguese finance ministry could oversee sale offailed banks:Experts at Banco de Portugal recommend that an autonomousgovernment body, controlled by the Ministry of Finance, should takeresponsibility for the sale of failing banks to avoid conflicts of interestbetween banking supervision and the selling of failed banks, Económico reports.

* Portuguese Minister ofPresidency Maria Manuel Leitão Marques refused tocomment on former Finance Minister João Salgueiro's statements made during a radio interview at Antena 1 that three other Portuguese banks arein need of financial bailout, among them Caixa Geral de Depósitos SA and . After thecontroversial statement, Salgueiro talked to Dinheiro Vivo, and said alternate solutions, and notnecessarily a financial rescue, might be enough to solve the institutions'problems.

* Banco BilbaoVizcaya Argentaria SA Chairman Francisco González believes it"necessary" that the financial system boost efficiency andproductivity "drastically." He added that technologicaltransformation was "the most powerful" factor in achieving suchobjectives, Expansión writes.Bloomberg News writesthat the bank is adopting a new pay structure that links bonuses to performancemetrics. Thescheme, which will be in place starting this year, includes targets reflectingthe performance of the group and its business units.

* IbercajaBanco SA CEO Víctor Iglesias Ruiz said there are alternate ways tomergers for banks' future viability. The executive said Ibercaja Banco's planto continue independently was viable and sustainable. Speaking at the presentationof a strategic partnership with Microsoft aimed at giving impulse to the bank'sdigitization process, Iglesias added that the lender hoped to be"perfectly prepared" to make its market debut by October, El País reports.

ITALYAND GREECE

Newchairman at Veneto Banca: Veneto Banca SCpA appointed a new board ahead of a €1billion capital increase and IPO scheduled for later this month, Reuters says.Stefano Ambrosini was appointed new chairman, with Cristiano Carrus remainingat the helm as director general.

* Banca Montedei Paschi di Siena SpA mandated Mediobanca SpA to create a platform to manage itsnonperforming loans, a source toldReuters. The bank yesterday reported a 35.2% year-over-year decrease infirst-quarter net profit to €93.2 million. Net loans made up 21.2% of totalloans to customers, an improvement on the year-end 2015 ratio of 21.7%.

* Meanwhile, Monte dei Paschi CEO Fabrizio Viola said the bank does notintend to reduce its current capital buffer to offload bad loans, Reuters notes.Viola also said that it is too early to determine what opportunities the newlycreated Atlante bank rescue fund could create for Monte dei Paschi.

* Bank of Italy governor Ignazio Visco said concerns aboutItalian nonperforming loans are "exaggerated," MF writes,adding that the ECB is not pushing for their rapid disposal. Visco also said EUbank bail-in rules should be rethought, Reuters reports.

* Morgan Stanley believes that Greek bondswill be eligible for the ECB's bond purchase program, capital controls will belifted and the Greek economy will restart once the review is over. However,analysts at Morgan Stanley say funding issues and the weak liquidity of Greekbanks will most probably raise problems, since arrears will increase, making itdifficult for NPLs to be serviced smoothly, Imerisianotes.

NORDICCOUNTRIES

Norway details bank tax: The Norwegian government plansto raise 3.5 billion kroner annually through a new tax on the financial sector,Dagens Næringsliv reports. The government isintroducing a tax on value added in financial intermediation, justifying it bypointing out that the financial sector is exempt from VAT. The details of thenew taxation will not be made public until the state budget for 2017 ispresented in October.

*The number of Danes using alternative financing options when buying real estatehas increased in the last few years, BerlingskeBusiness writes. In two years, total lendingfrom the 11 largest housing credit intermediaries that are not banks, increasedto just above 1 billion Danish kroner from 28 million kroner.

*SparekassenKronjylland, Sparekassen Sjælland-Fyn A/S, and twoother Danish regional banks have opened a total of 89 new branches in the lastfive years, while the country's largest banks have closed 328 branches duringthe period, according to Børsen.

EASTERNEUROPE

Sberbank mulls yuan issues: PAO Sberbank of Russia is developing relationships with a number ofChinese banks and will consider the diversification of its liabilities throughthe issuance of debt instruments denominated in yuan, Vedomosti and Kommersantreport. The bank did not provide information on the possible size and timing ofthe issuance.

* The Russian government approved the sale of 2.7% Gazprom sharesowned by Vnesheconombank to Gazprom, Kommersant reports.The sale could bring VEB in excess of $1.6 billion. The state-owned lender isalso looking for buyers to acquire its holdings in Russian mining andmetallurgical companies.

* AOGazprombank intends to shut unit Bank GPB-Mortgage in the firsthalf of 2017 after completing the sale of its assets, Kommersant reports.The unit's liabilities to clients as well as its real estate will be taken overby Gazprombank and other companies of the Gazprombank group in 2016.

* Thenew owners of OAO DalnevostochnyBank launched the squeeze-out of minority shareholders, offeringthem 441.53 rubles per share, Vedomostisays.Russian Regional DevelopmentBank recently sold its 70% stake in Dalnevostochny to Region AssetManagement. The latter company currently owns around 80% of the lender, havingpurchased another 9.6% of its shares from sister company Region PortfolioInvestments.

*Alior Bank SA'sshareholders approved the issue of new shares forup to 2.2 billion Polish zlotys in preparation to acquire the core business ofBank BPH SA. Theshares will be issued in a public offering with pre-emptive rights for existingshareholders. Alior's largest shareholder, PZU SA, committed to subscribe to the capital increaseon a pro rata basis to its existing stake.

* Poland could shelve plans to forcelenders to convert Swiss franc-denominated mortgages into local currency, withother options now being considered, Reuters reports. One option could be to allow people to give up theloans and their mortgaged homes, while staying on in the properties by payingrent. Another scenario is to force lenders to compensate borrowers for thecharged costs of currency conversions. The new proposals are expected to beannounced at the end of May.

* TheCzech central bank intends to continue with currency interventions untilmid-2017, keeping the local currency at around 27 koruny to the euro, Hospodarske Noviny reports. Reuters also reports.

* Theshares of Czech lender MONETAMoney Bank a.s. will be priced at 68 koruny apiece in its upcomingIPO, the bottom of the previously announced price range, E15 reports. The shares are expected to start trading onthe Prague Stock Exchange today. Reuters also reports.

* Reuters cites HungarianEconomy Minister Mihaly Varga as saying that the country intends to close thedeal to acquire a 15% stake in Erste Bank Hungary Zrt. in May or June.

* The Hungarian central bank intends to introducean incentive for banks to boost lending to small and medium-sized firms,Reuters reports,adding that banks that actively lend to SMEs could get five-year allowances forcapital buffers they have to set aside to cover loans.

*The central bank of Kazakhstan reduced its main policy rate to 15% from 17%,Reuters reports.Pressure on the tenge and lower inflation risks were cited as reasons behindthe move.

INOTHER PARTS OF THE WORLD

* Japanese Prime Minister Shinzo Abe said the governmentshould expedite fiscal stimulus measures before the country plunges into aneconomic crisis, The Sankei Shimbun reports.

* The Reserve Bank of India proposed to grant universalbanking licenses to both individuals and some businesses, Business Standard reports.However, the criteria for approval will rule out many large business groupsfrom acquiring the license.

* Banco Central de la República Argentina adopted measuresto increase themonthly minimum of U.S. dollar currency purchases to $5 million from $2 million.

* Following two years of negotiations, Brazilian financialinstitution Agiplan Financeira reached a deal to struggling local lenderBanco Gerador SA, Valor Econômico reports. Terms of thedeal, which is subject to central bank approval, were not disclosed.

NOWFEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Banks secureblockchain as attempted $1B heist flags cyber dangers: An attemptto steal almost $1 billion using banking's main international communicationssystem came as financial services companies pin their hopes on blockchain for amore resilient technological future.

RSA may beatanalysts' 2016 profit forecasts, says CEO Hester: RSA InsuranceGroup CEO Stephen Hester said during a first-quarter earnings presentation thatthe insurer could beat analysts' 2016 forecasts.

Swedish banksshow the European challenge: Swedish banks remain well-positionedcompared to many of their European peers, but pressure on interest, fee andtrading income demonstrate the challenges faced across the continent.

Xana Kakoty, Leo Magno, EdMeza, Stephanie Salti, Praxilla Trabattoni, Heather O'Brian, Beata Fojcik, KeesPijnappels, Esben Svendsen, Mariana Aldano, Thanasis Kakalis and Ali Kayalarcontributed to this report.

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