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Popolare di Vicenza IPO update; BCP targets Novo Banco; Swedbank's Baltic drive

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Popolare di Vicenza IPO update; BCP targets Novo Banco; Swedbank's Baltic drive

Weidmann warns onrisks from loose monetary policy: ECB Governing Council member and DeutscheBundesbank President Jens Weidmann warned of increasing risks from low interestrates and money printing, saying the longer ultra-expansionary monetary policy isin place, the less effective it is, Reuters reports.Separately, ECB President Mario Draghi argued that there is currently no alternativeto low rates, City A.M. writes.Draghi said yesterday that interest rates will stay "at present or lowerlevels for an extended period of time."

* ECB policymaker Ignazio Visco warned that requiring banksto hold additional capital to cover risks associated with their government bondholdings or limiting their exposure to such bonds could disrupt the lenders'capacity to serve as shock absorbers during sovereign stress, Reuters reports.Meanwhile, ECB Executive Board member Sabine Lautenschläger indicatedthat the imposition of risk weights on banks' sovereign bond holdings would be"an important step towards breaking the vicious circle between banks andsovereigns." She added that such a move would also reinforce thefoundations of monetary union.

* The ECB purchased €85.2 billion of debt in April,Bloomberg News reports,citing central bank data. Holdings of public and private-sector debt under theECB's quantitative easing program increased to €917.8 billion last month. TheECB is due to start purchasing corporate bonds next month as part of anexpanded quantitative easing program unveiled in March.

UK AND IRELAND

Volatility hitsHSBC in Q1: HSBC HoldingsPlc today reportedfirst-quarter profit attributable to shareholders of the parent company of$4.30 billion, down from $5.26 billion in the same period a year ago. The banksaid revenues in its markets and wealth management businesses were impacted byextreme volatility in the first two months.

* AberdeenAsset Management Plc today reporteda profit before tax of £162.9 million for the first quarter, down from £270.2million a year earlier. AUM at March-end came in at £292.8 billion, down from£330.6 billion at the same period in 2015. CEO Martin Gilbert said the resultsreflect the "challenging conditions" that his company faced duringthe past three years.

* AvivaPlc completed its acquisitionof a further 23% stake in AvivaLife Insurance Co. India Ltd. from Dabur Invest Corp. Thecompletion followed recent regulatory changes in India that allows Aviva toraise its stake in the joint venture to 49%.

GERMANY, SWITZERLANDAND AUSTRIA

Deutsche Bank under fire for 'serious' control failures: The U.K. Financial ConductAuthority criticized 's efforts toprevent money laundering, the Financial Times reports. In an letterdated March 2 sent to the German bank, the watchdog described the bank's anti-moneylaundering, terrorist financing and sanctions failings as "serious" and "systemic"and noted that "effectivesenior management engagement and leadership on financial crime had been lackingfor a considerable period of time."

* CommerzbankAG reported first-quarter consolidated netprofit attributable to shareholders of €163 million, compared to theyear-ago €338 million. Net interest income fell year over year to €1.33billion, while net commission income declined over the period to €821 million.The group's loan loss provisions totaled €148 million in the period, down fromthe year-ago €158 million.

* Commerzbank helped foreigninvestors exploit a tax loophole that artificially lowered German tax paymentsby more than €1 billion a year for more than a decade, Handelsblatt reports.The trick made it possible for investors to lower their capital-gains taxpayments and claim maximum tax refunds from the German government by using aninvestment technique called "dividend stripping'' with the help ofCommerzbank and other domestic lenders.

* UBS GroupAG today reporteda year-over-year drop in first-quarter net profit attributable to shareholdersto CHF707 million from CHF1.98 billion. The bank's results for the periodincluded net tax expenses of CHF270 million, of which CHF205 million wasprimarily related to current taxes payable by and its subsidiaries, includingUBS Switzerland AG.

* The European Commission saidyesterday that a €3 billion increase in the guarantee ceiling provided in June2013 by German states Hamburg and Schleswig-Holstein to stabilize was in line withEU state aid rules. The EC approval would pave the way for the bank's salefollowing the transfer of its troubled shipping loans to a bad bank, Bloomberg notes.

* Deutsche Bank's CEO for North America, Jacques Brand, isleaving the group to join PJT PartnersInc., insiders tellReuters. The German lender confirmed Brand's departure, saying that he willpursue another business opportunity.

* Stuart Smith, global head of health care investmentbanking at Credit Suisse GroupAG, is leaving the groupfor a new role at Centerview Partners in New York, Bloomberg reports. Michael Muntner is also leaving Credit Suisse's health care team to join Smith at Centerview.

* A number of leading sparkassen are establishing a so-called smartphonebank, Süddeutsche Zeitung writes. Known asYomo, the new offering is set to launch in the fall, primarily targetingcustomers between 18 and 35 years old. 

FRANCE AND BENELUX

BNP Paribas seesdecline in risk costs: BNPParibas SA posted first-quarter net incomeattributable to equity holders of €1.81 billion, compared to €1.65 billion inthe same period in 2015. The cost of risk fell on a yearly basis to €757million from €1.04 billion. The bank attributed the decline to good control ofrisks at loan origination, the low interest rate environment and theimprovement recorded in Italy.

* Philippe Hébert, chief risk officer of 's French operations,warned of possible failures in the bank's controls against mis-selling andmoney laundering, the FT reports.In an April 5 letter to Barclays France CEO Tony Blanco, Hébert cited a numberof suspicious activities, including the detention of employees at the bank'sNantes branch by police over suspected money laundering and the unusually highlevel of frequent large cash withdrawals by customers at its Biarritz branch.

* French insurers have been forced to strengthen theirresources in order to deal with the increasing amount of escheated lifeinsurance policies, LesEchos and L'Agefiwrite. The amount of escheated life insurance policies has reached €5.4 billionfor the 28 main life insurers in France, representing 90% of the market, LesEchos notes,citing French prudential regulator ACPR.

* HSBC's French subsidiary is investing €90 million by 2018to revamp its online services, accordingto Les Echos. The bank will launch a simplified online accountopening service in the next few weeks.

* CréditMutuel Group units BKCP Banque SA and Beobank NV/SA completed their merger, L'Echo writes.The new entity will cover a network of 240 branches and will offer retailbanking services.

* Delta LloydNV said yesterday it remains committed to its intention to pursue asale of its stake in Van LanschotNV through a marketed offering in the course of theyear. Delta Lloyd said Van Lanschot has agreed to support the intendedoffering.

* An increasing number of Dutch multinationals aremoving their pension funds to Belgium, HetFinancieele Dagblad writes.Belgian pension funds currently manage €550 million in Dutch pension money. 

SPAIN AND PORTUGAL

BCP eyes NovoBanco as Q1 profit drops YOY: Millennium BCP yesterday reporteda net income attributable to shareholders of the bank of €46.7 million for thethree months to March 31, down from €70.4 million a year earlier. The companynoted that the year-ago results included one-off gains on government bonds of€115.8 million, net of taxes.

*BCP CEO Nuno Amado said the lender is interested in participating in the salesprocess of Novo BancoSA and is seeking ECB approval to be part of negotiations, Jornal de Negócios writes,noting that BCP is legally banned from participating for having received astate bailout in the past. Amado added that the lender is likely to close adeal to sell unit BancoActivoBank SA this month and that it intends to close about 90branches by 2018.

* Arecent provisional injunction by a Portuguese court against the transfer ofsome bonds from Novo Banco back to predecessor applies tofour out of a series of five bonds, Jornalde Negócios notes.The court ruling, which followed a request from Merrill Lynch to suspend thebond transfer, was previously reported to apply to only one of the five bonds.

* Despite a generalized trend of clamping down on moneylaundering and on the use of so-called tax havens, a number of Spanish bankinggroups continue to have units in countries considered to offer more favorabletax regimes. Expansión writes.Banco Santander SAand Banco Bilbao VizcayaArgentaria SA have reduced the number of their units in such taxhavens to 15 and seven, respectively. Many of the offshore units are keptrunning as they were used to issue preferred stock at a time when Spain's legalframework did not allow such capital instrument issuances, insiders tell thepaper.

ITALY AND GREECE

Popolaredi Vicenza IPO fails:The Milan stock exchange said Banca Popolare di Vicenza SpA did not meet listingrequirements after its €1.5 billion cash call failed to attract sufficientinvestor demand, leaving the Italian bank rescue fund Atlante with a 99.3%stake in the bank, Reuters reports.Atlante fund manager Quaestio will call a Popolare di Vicenza board meetingshortly to appoint new management to turn around the bank, according to La Repubblica.

* A group of banks helping Popolare di Vicenza with its €1.5billion share issue would not receive €60 million in fees after the transactioncollapsed, Reuters reports.Mediobanca SpA wouldhave taken roughly 5% of Popolare di Vicenza if the listing pushed through. Theother banks involved in the transaction include and BNP Paribas.

* BancoPopolare Società Cooperativa CEO Pier Francesco Saviotti said duediligence for its planned merger with Banca Popolare di Milano Scarl will be completed byFriday while the industrial plan for the combined group will be ready to bepresented to the banks' boards and the ECB by mid-May, Reuters writes.Saviotti also said BancoPopolare is not worried about its planned €1 billion capital increase after thefailure of Popolare di Vicenza's cash call.

* IntesaSanpaolo SpA entered into an agreement to sell the total sharecapital of units Setefi and IntesaSanpaolo Card Ltd. to a wholly owned subsidiary of Mercury UKHoldco Ltd. for nearly €1.04 billion in cash. The transaction willgenerate a net capital gain of approximately €895 million for Intesa Sanpaolo's2016 results.

*Wellington Management Group, a key investor during the recapitalization ofGreek banks, reduced its stake in the Athens Stock Exchange to 4.94% in recentdays, Capital writes.

NORDIC COUNTRIES

Swedbank mullsBaltic expansion: SwedbankAB is considering expanding further in Latvia and Lithuaniafollowing its acquisition of Danske Bank A/S units, Bloomberg reports.Priit Perens, head of Swedbank's Baltic unit, said the group's market share inthe two countries is not big enough for its planned acquisitions to drawcompetition concerns.

* Nordea BankAB's funds are no longer allowed to invest in the bank's shares inthe wake of the Panama Papers scandal, Nordea Asset Management head SasjaBeslik tellSvenska Dagbladet. The prohibitionwill last for at least six months.

* Anne Carine Tanum's re-election last week as chairman ofDNB ASA's board ofdirectors was in violation of the bank's statutes, Aftenposten reports.Tanum, who has served as chairman since 2008, has already served five yearslonger than the statutes allow. The group attributed the supposed violation toan "unfortunate and unintended" wording in the statutes and will aimto make the wording clearer.

EASTERN EUROPE

Getin Noble Bank tosell stake in asset manager: Poland's Getin Noble Bank SA agreed to sell a 9.99% stake inasset manager Noble Funds TFI to Open Finance for 21 million Polish zlotys, Rzeczpospolita reports.Payment for the shares will be spread over five years and Open Finance will payan additional amount of nearly 1.9 million zlotys as part of the deferredpayment terms.

* As part of Alior Bank SA's planned acquisition of 's core business, BPHshareholders other than current owner GE and its related entities will receive0.44 of a demerger share to be issued by Alior for each BPH share, PAP writes.

* Polish banks expect a major tightening of criteria forgranting mortgage loans in the second quarter, PAP reports,citing a quarterly survey by the country's central bank.

* reporteda net profit of 969.0 million Turkish lira in the first quarter, up from 912.2million lira in the year-ago period.

* Yapi veKredi Bankasi AS yesterday reporteda first-quarter net income of 704 million lira, compared to 501 million lira ayear earlier. Net interest income increased year over year to 1.95 billion lirafrom 1.52 billion lira.

* PAO Sberbankof Russia unit DenizBank AS solda nonperforming loan portfolio amounting to nearly 204.7 million lira to assetmanagement company Final Varlik Yönetim AS for 25.4 million lira.

IN OTHER PARTS OF THEWORLD

* Australia & New Zealand Banking Group Ltd.'sstatutory profit decreased22% year over year to A$2.7 billion for the six months ended March 31, whilecash profit stood at A$2.8 billion, down 24% from the prior-year period. Thebank declared a dividend of 80 Australian cents per share.

* Australian entrepreneur Craig Wright said he invented thecontroversial digital currency bitcoin and gave technical proof, Reuters reports.The claim has been met with some skepticism.

NOW FEATURED ONS&P GLOBAL MARKET INTELLIGENCE

: Greece and its creditors are engaged in anothergame of brinksmanship. For the country's banks, access to cheaper funding andhopes of balance sheet clean-up hinge on an agreement.

: A further delay in divesting Williams & Glyn maymean Royal Bank of Scotland shareholders have to wait longer for a restorationof dividends.

: The bank took a hit on capital due to ashare buyback and the implementation of a new risk-assessment model, CEO ThomasBorgen said.

: Swiss Re CFO David Cole told analysts thatthe reinsurer recorded large increases in gross written premiums in some linesof business in April.

: Lloyd's of London Chairman JohnNelson described as "a complete fantasy" any expectation that theU.K. government would quickly make European trade agreements following aBritish exit from the EU.

Leo Magno, Ed Meza, StephanieSalti, Praxilla Trabattoni, Heather O'Brian, Beata Fojcik, Kees Pijnappels,Esben Svendsen, Mariana Aldano, ThanasisKakalis and Ali Kayalar contributed to this report.

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