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Commerzbank pink slips; RBS' plan B probed; JPMorgan chief talks Brexit


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Commercial Banking: June 22nd Edition


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Commercial Banking Newsletter June Edition - 2022

Commerzbank pink slips; RBS' plan B probed; JPMorgan chief talks Brexit

* The European Securities and Markets Authority launched a consultation on updating guidelines on the application of the endorsement regime under rules on credit rating agencies. Currently, credit ratings issued by agencies in a so-called third country can only be used for regulatory purposes in the EU after it has been endorsed by an EU-regulated agency. The ESMA is proposing tougher conditions for the endorsement of ratings issued by a third-country agency, potentially making it harder for agencies in post-Brexit Britain to offer services in the EU, Reuters notes.

* European Parliament member Manfred Weber said all euro businesses, including euro-denominated clearing, "should be managed on EU soil" instead of London after Brexit, The Guardian reports.


* The European Commission launched an in-depth investigation into whether the package proposed by U.K. authorities as an alternative to Royal Bank of Scotland Group Plc's required divestment of Williams & Glyn is an appropriate replacement. RBS is required to divest Williams & Glyn to remedy competition concerns in the U.K. small and medium-sized enterprise banking sector, but the group struggled to find a buyer for the full business.

* JPMorgan Chase & Co. Chairman, President & CEO Jamie Dimon said the bank's Brexit contingency plan does not entail moving many people out of the U.K. in the next two years, noting that the U.S.-based lender can still serve European clients from Britain, The Daily Telegraph writes. Dimon had warned before the Brexit referendum in June 2016 that up to 4,000 jobs could be relocated out of Britain if it voted to leave the EU.

* U.K. Prime Minister Theresa May told Sky News that a final trade deal with the EU will not be signed within the two-year Brexit negotiation period and that the U.K. will adopt third-party status when dealing with the EU after it leaves the bloc.

* London Stock Exchange Group Plc CEO Xavier Rolet joined May at a meeting with Saudi Arabian finance officials to lobby for the LSE as a listing venue for oil giant Saudi Aramco's planned IPO, an insider tells Bloomberg News.

* The Bank of England's Financial Policy Committee warned that an easing in credit supply conditions in the U.K. appeared to have contributed to the rapid growth in consumer credit, potentially representing a risk to lenders if accompanied by weaker underwriting standards. The Financial Times and Reuters have reports.

* Barclays Plc completed the sale of its U.K. trusts business to Zedra, an independent provider of trust, corporate and fund services. The sale forms part of the lender's overall noncore divestment process, which it aims to complete by June 30.

* Rune Madsen, founder of U.K.-based Runestone Capital Fund, said the volatility hedge fund aims to reach $100 million in total AUM this year, Bloomberg reports.

* Central Bank of Ireland Governor Philip Lane said Irish lenders have paid out more than €120 million in the past two years in redress and compensation to mortgage customers who were denied tracker rates, The Irish Times reports.


* Commerzbank AG plans to reduce its headcount in Germany by about 7,800 employees as part of a restructuring, Handelsblatt reports. The bank declined to commit to a specific number of job cuts before it completes the negotiations with its works council, which noted that the cuts are "much more than originally expected."

* German financial regulator BaFin and the Deutsche Bundesbank will launch a new stress test for small lenders that are not under the supervision of the ECB. Some 1,500 savings and cooperative banks will participate in the survey, designed to measure their ability to cope with interest rate changes over the next four years.

* Commerzbank unit comdirect bank AG completed the full acquisition of OnVista AG from Boursorama SA. Comdirect will merge online broker OnVista Bank GmbH into the lender during the second quarter.

* DekaBank Deutsche Girozentrale reported net income attributable to shareholders of €264.0 million for full year 2016, down from €329.9 million a year ago.

* Landwirtschaftliche Rentenbank became the first bank in Germany to grant loans at negative interest rates to clients, Frankfurter Allgemeine Zeitung reports.

* Swiss financial markets regulator FINMA discontinued its investigation into UBS Group AG concerning its involvement in the 1MDB scandal in Malaysia after finding no systematic, serious misconduct, Reuters reports. The regulator, however, sent UBS a written reprimand. Three private banks are still under investigation relating to the scandal, Bloomberg writes.

* FINMA is in contact with Credit Suisse Group AG about raids at the bank's offices in London, Paris and Amsterdam relating to tax evasion allegations, Handelszeitung reports. Separately, the regulator's enforcement report for 2016 showed that it handled 22 money laundering incidents last year, up from just nine in 2015.

* BAWAG PSK reshuffled its executive board, appointing David O'Leary head of retail business and Andrew Wise new head of nonretail lending, in addition to his role as chief investment officer.

* Oberbank AG plans to increase the number of branches to 175 from the current 159 by 2020 and to expand in Germany, Czech Republic and Hungary, Der Standard writes.


* Société Générale SA completed the acquisition of 50% of French life insurer Antarius SA from Aviva Plc, becoming Antarius' sole shareholder.

* BNP Paribas SA signed a memorandum of understanding to acquire a 95% stake in Financière des Paiements Électroniques, which provides the Compte-Nickel payments account. The transaction price is believed to be about €200 million, Le Monde reports.

* The French Finance Ministry is pushing for more reform in payment services, arguing that the EU's second directive on payment services does not go far enough, Les Echos reports.

* French investigators receiving help from Panama are now targeting 26 cases of suspected tax fraud as a result of the Panama Papers scandal, up from the 13 initially targeted, and will probably include banks and lawyers involved in tax evasion, Le Monde writes.

* Dutch banks have allocated hundreds of millions of euros to urge property developers to move to more sustainable solutions and reduce carbon dioxide emissions of commercial real estate, Het Financieele Dagblad reports.


* Oitante SA, the Portuguese vehicle established to manage the toxic assets of Banif-Banco Internacional do Funchal SA, sold a real estate and asset management unit to Altamira, which is 85%-owned by Apollo Global Management LLC and 15%-owned by Banco Santander SA, according to Jornal de Negócios.

* Portugal's public prosecutor archived charges against Dias Loureiro, former CEO of nationalized Banco Português de Negócios, and former Secretary of State José de Oliveira and Costa, according to Lusa. The pair were indicted on charges of fraud, money laundering and qualified tax fraud but the prosecutor's office said the case had been shelved due to insufficient evidence.

* The mutual association that fully owns Caixa Económica Montepio Geral approved a plan for the bank to assume limited company status, Jornal de Negócios writes.

* The Spanish Supreme Court confirmed €3 million in two sanctions imposed on Banco Bilbao Vizcaya Argentaria SA by the Economy Ministry for the bank's concealment of €224 million in assets in offshore tax havens between 1996 and 2000, El País reports.

* Standard Life Investments has reduced its stake in Bankinter SA to 4.007% from 5.2%, Europa Press writes.


* The Italian Senate approved a motion to set up a committee to study the effects of the global financial crisis on the banking system and its consequences on the worsening state debt, Corriere della Sera reports.

* Banca Popolare di Vicenza SpA and Veneto Banca SpA confirmed that they qualified for a precautionary recapitalization by the Italian state and that both banks are currently solvent.

* Popolare di Vicenza sold a 6.02% stake in Società Cattolica di Assicurazione SC through an accelerated book building, reducing the bank's stake in the insurer to about 9.05%. Meanwhile, Società Cattolica exercised its put option to exit from its bancassurance joint ventures with Popolare di Vicenza, according to MF.

* Mediobanca - Banca di Credito Finanziario SpA now owns 100% of Banca Esperia SpA after completing the acquisition of the 50% stake it did not own from Banca Mediolanum SpA for €141 million.

* The Banca d'Italia placed Banca di Credito Cooperativo di Cittanova SCpA under special administration for serious irregularities and repeated violations of money laundering rules, Il Sole 24 Ore writes.

* Intesa Sanpaolo SpA announced the opening of new corporate and investment banking branches in Abu Dhabi, United Arab Emirates and Doha, Qatar. The new branches will be coordinated by the Italian bank's Dubai HUB branch.

* Separately, Intesa sent out teasers for the €1.35 billion securitization foreseen in the Rep Project that has attracted interest from Fortress Investment Group LLC, Cerberus Capital Management LP and other parties, Il Sole 24 Ore writes. The bank also postponed the deadline for potential bidders to submit binding offers for a portfolio of €2.5 billion of bad loans to April 6 from April 4 because of technical and legal matters, according to Reuters.

* Italy included the Vatican City on its so-called white list of countries with cooperative financial institutions, Reuters reports.

* European Commissioner for Financial Affairs Pierre Moscovici said the EC believes that a staff level agreement on new loans for Greece is "not only possible but also necessary to limit risks linked to a delay," Reuters writes.


* Nordea Bank AB (publ) CEO Casper von Koskull said the bank does not want to leave its headquarters issue "unresolved too long," Børsen reports. Von Koskull also said the bank will launch significant capital spending programs to boost its digital banking capabilities, Affärsvärlden writes.

* DNB ASA CEO Rune Bjerke said the Norwegian lender has no plans to decrease activity in its London operations as a result of Brexit, noting that the U.K.'s decision to exit the bloc may even prove beneficial to the lender, Bloomberg reports.

* Norway-based Protector Forsikring ASA said the Swedish Competition Authority yesterday performed control in its Swedish branch, Reuters reports.


* Russian President Vladimir Putin signed a law that bans money transfers to Ukraine through foreign payments systems to eliminate the negative consequences of sanctions imposed by Ukraine last year.

* The Russian Finance Ministry proposed to lift a ban on reinsurance of risks under motor third party liability insurance and wants the Russian National Reinsurance Company to provide reinsurance services for this segment, Vedomosti writes.

* The Investigative Committee of Russia carried out searches in the Moscow office of Deloitte, Kommersant writes. The searches are reportedly connected to the case of OAO AKB Probusinessbank, which used Deloitte's auditing services for years before it lost its license in 2015, with an almost 70 billion Russian ruble hole revealed in its assets.

* B&N Bank's auditor Ernst & Young is concerned by the fact that half of the lender's assets are tied up in JSC Rost Bank, the financial recovery program of which is overseen by B&N Bank, Vedomosti writes. The auditor points out that the amount of loans provided to support Rost continues to grow, and the lender will only start paying them off in 2020.

* Ceskomoravská stavební sporitelna a.s. became the sole partner of Czech postal operator Ceska pošta for the sale of home building saving products after Raiffeisen stavební sporitelna a.s. stopped offering its products via post offices, Hospodarske Noviny reports.

* CROATIA osiguranje dd completed the merger with reinsurer Croatia Lloyd dd, SEENews reports. The merger will allow Croatia Osiguranje to expand into the reinsurance segment and boost the business results of its units in Macedonia, Bosnia and Herzegovina, Serbia and Slovenia.

* PKO Bank Polski SA CEO Zbigniew Jagiello expects the lender will see "strong" single-digit profit growth in 2017.


Asia-Pacific: Swiss regulator halts probe into UBS; Daiwa mulls new European subsidiary

Middle East & Africa: Moody's puts SA banks on review for downgrade; Al Hilal gets new CEO

Latin America: Investa Bank sells brokerage firm; Chile cuts 2017 growth forecast

North America: Asset managers move to block Lone Star-Novo Banco deal

North America Insurance: Republicans push new healthcare bill; AIG remains opposed to split


Tax probe unlikely to jeopardize Credit Suisse's capital raising plan: Credit Suisse should be able to raise more capital despite the ongoing investigations over alleged tax evasion and money laundering launched against some of its clients in five countries, although the timing is not ideal, analysts have said.

3rd-party distribution pays off for Nordea Asset Management: While other European asset managers have seen persistent outflows, Nordea Asset Management has seen robust inflows, buoyed by its third-party fund distribution network and increasing wealth in the Nordic region.

Leo Magno, Arno Maierbrugger, Meike Wijers, Gerard O'Dwyer, Beata Fojcik, Mike Hatzidakis, Ali Kayalar, Yael Schrage, Brian McCulloch, Sophie Davies and Helen Popper contributed to this report.

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