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BoE flags concerns about leveraged loans; HSBC settles US RMBS claims for $765M


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BoE flags concerns about leveraged loans; HSBC settles US RMBS claims for $765M


* A rapid growth in lending to already highly indebted U.K. companies is worrying the Bank of England, which said it will review the increasing role of nonbanks in this market to assess risks to financial stability. The BoE's Financial Policy Committee said the global leveraged loan market is larger and growing as quickly as the U.S. subprime mortgage market was in 2006, before the 2008 global financial crisis.

* Additionally, the FPC said the British banking system would cope even with a disorderly British exit from the European Union, but the EU itself needs to act fast to protect cross-border financial services from the risks of a so-called hard Brexit, particularly those associated with derivative contracts and the transfer of personal data. UK Finance CEO Stephen Jones echoed the FPC's call, saying it was crucial to address issues related to the continuity of contracts and transfer of personal data to minimize disruption for firms and customers in both the U.K. and the EU.

* Meanwhile, the pound rose yesterday following reports that the U.K. and the EU could settle Brexit terms by Monday. Sterling traded 0.20% higher against the dollar at $1.317 as of 7:30 a.m. London time.

* HSBC Holdings PLC unit HSBC North America Holdings Inc. agreed to a $765 million civil penalty to settle claims by the U.S. Department of Justice over its practices regarding residential mortgage-backed securities. HSBC USA Inc., a subsidiary of HSBC North America, will pay $492 million of the total penalty.

* Standard Chartered PLC CEO Bill Winters told senior staff that the British lender is "closely engaged in constructive, ongoing discussions" with U.S. authorities over possible violations of Iran sanctions that could cost the bank more than $1 billion in penalties, The Wall Street Journal reported.

* The U.K. government will go "above and beyond" to comply with European payments regulations even after Brexit, according to Imran Gulamhuseinwala, a leading financial technology expert at Britain's Competition and Markets Authority.

* Lloyd's of London is looking to move all of its European Economic Area business to its Brussels subsidiary before the end of 2020.

* Shawbrook Group PLC has approached Vanquis Bank Ltd. Managing Director Christopher Sweeney to replace Steve Pateman as CEO, sources told Sky News.

* U.K. litigation finance business Vannin Capital Holdings Ltd. has withdrawn its proposed IPO, which had been scheduled for this month, due to volatility in the equity markets in the last two weeks, the Financial Times wrote, citing Vannin Capital CEO Richard Hextall.

* Moody's revised the outlook on the Irish banking system to positive from stable, driven by the agency's expectation that Ireland's asset quality will improve.


* Landesbank Baden-Württemberg has pulled out of the bidding process for a stake in Norddeutsche Landesbank Girozentrale, Handelsblatt wrote, citing a report by Süddeutsche Zeitung. Landesbank Hessen-Thüringen Girozentrale and a number of international financial investors remain as bidders.

* The German government is looking to raise an additional €30 billion from investors for FMS Wertmanagement AöR, the winding-up institution for the nationalized Hypo Real Estate Holding AG, Tammo Diemer, managing director of the German Finance Agency agency, told Reuters.

* KfW has set up KfW Capital, a new venture capital subsidiary in Frankfurt aimed at developing the venture capital and venture debt funding landscape in Germany and Europe.

* Rothschild & Co. SCA's Swiss trust unit is preparing a management buyout, wrote, citing a report by Bloomberg.

* Crypto Fund AG said it obtained a license from the Swiss Financial Market Supervisory Authority to operate as an asset manager.


* France-based Orange Bank SA's board approved Paul de Leusse's appointment as CEO. His predecessor, André Coisne, will remain with the bank as an adviser.

* France's Court of Cassation ruled in favor of JPMorgan Chase & Co. in its bid to strike down an indictment ordering the U.S. lender to stand trial for allegedly assisting clients in committing tax fraud more than 10 years ago, according to Bloomberg News.

* Morgan Stanley will install its new multilateral trading facility in Paris and not London to hedge against Brexit, Les Echos wrote.


* Banco Bilbao Vizcaya Argentaria SA CEO Carlos Torres said his successor will be someone who already works for the bank, El Economista reported. Torres will replace Francisco González as group executive chairman when he steps down by the end of 2018.

* Bankia SA CEO José Sevilla said he will not rule out further strategic alliances in the future, but has nothing in sight for the moment, Europa Press reported.

* Millennium BCP has admitted the possibility of a hostile takeover for the bank, amid an ongoing trend of consolidation in the European banking sector and given that the Portuguese lender has no restructuring plan in sight, Jornal de Negócios wrote.


* Italian borrowing costs have remained elevated, with yields on 10-year government bonds rising 4 basis points to about 3.55% as of 8:30 a.m. Rome time, as investors priced in their expectations of downgrades of Italian debt by rating agencies amid the government's standoff with the European Commission over its budget plans.

* EU banking supervisors have increased their monitoring of Italian banks' liquidity levels more intensely than usual due to the market turmoil in recent days, although no sign of alarm has been detected, a senior EU source told Reuters. Meanwhile, Banca D'Italia SpA Deputy Director General Luigi Federico Signorini said Italian lenders could be forced to seek capital from investors if the yield spread between 10-year Italian bonds and German Bunds of the same maturity continue to widen, according to Reuters.

* Banco BPM SpA is said to have tapped Nomura, Crédit Agricole and Morgan Stanley to advise the lender for options for the Agos Ducato SpA consumer credit business, in which it owns a 39% stake, Il Sole 24 Ore said. Separately, the Italian lender postponed the deadline for binding offers for its nonperforming loan portfolio to Nov. 14 from Oct. 30, Il Messaggero reported.


* Nordea Bank Abp was slow to react to an FBI warning in 2011 about a customer suspected by U.S. authorities of using an account held at the lender in Denmark for money laundering. Despite the warning, Nordea only moved to terminate the account in 2016, Dagens Industri wrote. The customer, Dan Consulting Strand House, filed for bankruptcy in 2017.


* The majority of Slovenian lawmakers rejected Banka Slovenije Deputy Governor Primož Dolenc's candidacy to take over the top job at the central bank, Reuters and Bloomberg reported.

* The Central Bank of the Russian Federation will recommend its board of directors to delay the process of increasing the requirements for the capital conservation buffer and the systemically important banks buffer by one year until January 2020, Vedomosti reported.

* The sale of PJSC Asian-Pacific Bank, taken over by the Russian central bank in April, has been facing delays due to a lawsuit that the lender's former shareholder, the International Finance Corp., plans to file in London over the write-off of a subordinated loan it provided to the bank prior to the takeover, Kommersant said. The central bank previously planned to sell Asian-Pacific Bank in September.

* The Czech Office for the Protection of Competition allowed NN Group NV to acquire Czech insurance company Aegon Pojištovna a.s. from Aegon NV, E15 reported. The competition regulator also approved a merger of Czech financial services companies Jet Money and EC Financial Services from Natland Group.

* Turkish President Tayyip Erdoğan named several advisers, including the chairman of Turkey's banking regulator BDDK, to a new economic policy committee, as the troubled country looks to ease investor unrest due to high inflation and fall in the Turkish lira, Reuters reported.


Asia-Pacific: Indian lender in asset buy; Vietcombank to sell bank stakes; ANZ case adjourned

Middle East & Africa: Bank of Israel names new governor; South Africa finance minister resigns

Latin America: Chinese firm invests in Nubank; IMF cuts growth forecast for Latin America

North America: Goldman cuts Marcus' 2019 lending target; Hedge fund Tourbillion to shut down

Global Insurance: Michael menaces Florida panhandle; Aviva boss steps down; Vivat could be sold


Share performance showed time was right for Aviva CEO to go, analysts say: Mark Wilson's exit from the CEO role at Aviva, the U.K.'s largest insurer, comes as little surprise, according to analysts, because of lackluster share price performance and unclear profit growth prospects.

UK spies spook banks into joining cyber training scheme: High-level hacking, industrial espionage and infrastructure-debilitating online attacks are imminent threats to U.K. banks, according to a top British cyber spy.

Leo Magno, Ed Meza, Danielle Rossingh, Gerard O'Dwyer, Beata Fojcik, Heather O'Brian, Brian McCulloch, Sophie Davies and Mariana Aldano contributed to this report.

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