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BoE's Carney extends term; potential Deutsche/Commerzbank merger gaining support

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


BoE's Carney extends term; potential Deutsche/Commerzbank merger gaining support

* The U.K. and the European Union are preparing a one-off meeting in mid-November to sign a Brexit deal and formally agree with terms of the separation, insiders told Bloomberg News.

* Mark Carney will remain as Bank of England governor until Jan. 31, 2020 to support a "smooth" Brexit and provide stability to the economy, the U.K. government said. Carney, who assumed the role in July 2013 and initially intended to serve for five years, agreed to stay on until June 2019 after the June 2016 Brexit vote.

* Meanwhile, Carney warned the global financial community against complacency in an interview with BBC News to mark the 10th anniversary of the financial crisis.

* A report by a joint committee of European supervisory authorities flagged potential sources of instability for the EU's securities, banking and insurance sectors, including abrupt yield increases, uncertainties around Brexit terms and potentially increasing interest rates.

* IMF Managing Director Christine Lagarde said she was not interested in the top jobs at the European Commission or the ECB, the Financial Times reported.

* JPMorgan Chase & Co. outlined plans to merge London-based J.P. Morgan International Bank Ltd. into Luxembourg-based J.P. Morgan Bank Luxembourg SA as part of a restructuring process that will allow the company to establish a significant wealth management business operation in Luxembourg. Meanwhile, Mark Garvin, vice chairman of JPMorgan's corporate and investment banking unit, said the company's Brexit plans are in "very advanced phases of execution" and that up to 4,000 employees could move should the U.K. and the European Union fail to agree on a deal, The Independent reported.

UK AND IRELAND

* U.K. Financial Conduct Authority CEO Andrew Bailey said the regulator is looking into allegations that banks systematically missold interest rate swaps to doctors, the Financial Times reported.

* Barclays PLC will create 150 new jobs in Europe as part of its preparations for the U.K.'s departure from the European Union in March 2019, Bloomberg News reported, citing Barclays Bank Ireland PLC CEO Kevin Wall.

* Meanwhile, Barclays said its capital reduction and those of units Barclays Bank PLC and Barclays Bank UK PLC became effective yesterday, following confirmations of the High Court of Justice in England and Wales.

* HSBC Holdings PLC will add 700 people at its Asia private bank by 2022 and double Asia-based client assets by 2025 as it looks to gain a bigger share of the region's growing wealth market, Reuters reported, citing senior executives at the bank.

* British pension trustees will be required to produce a statement of investment principles that will show how they will consider financially material risks, such as those related to climate change, in their investments under new rules that will come into force Oct. 1, 2019, the U.K.'s Department for Work and Pensions said.

GERMANY, SWITZERLAND AND AUSTRIA

* A merger between Deutsche Bank AG and Commerzbank AG is gaining support as an option to rescue Germany's two largest private commercial lenders from potential collapse, Der Spiegel reported. A deal has also reportedly become more popular in the management circles of the two banks, whose shares rose following the report.

* Andreas Krautscheid, CEO of the Association of German Banks, has warned that without a proper deal, Britain's exit from the EU could cause chaos in Europe's capital markets, Handelsblatt reported, citing an interview with the RedaktionsNetzwerk Deutschland. Krautscheid appealed to politicians to "move forward in the negotiations," adding that a no-deal Brexit could trigger "turmoil on the European capital markets – not only in London, by the way, but also in Frankfurt, Paris and Amsterdam."

* Bank Julius Bär & Co. AG is making an aggressive push in the U.K.'s private banking market with eight new senior hires, finews.com wrote. The lender has added seven relationship managers to its London office and an eighth in Leeds focusing on clients and families based in Yorkshire.

FRANCE AND BENELUX

* French financial regulator Autorité des Marchés Financiers said certain investment services providers have encouraged investors to open accounts at their subsidiaries outside the EU to circumvent new rules prohibiting the sale of binary options to investors in Europe and restricting access to contracts for difference.

* French financial stability regulator Haut Conseil de Stabilite´ Financie`re has indicated that the current boom in the mortgage market in France needs to be scrutinized, Les Echos and L'Agefi reported.

* Edouard Carmignac is stepping back from overseeing Carmignac Investissement, a fund investing in international equities that he has been running since its inception in 1989, Les Echos and L'Agefi reported. David Older, Carmignac's head of equities since 2017, will take over the management of the fund.

* ING Groep NV Chairman Hans Wijers said CEO Ralph Hamers's job is secure and that the latter has the complete support of the Dutch bank's supervisory board following the departure of CFO Koos Timmermans, Reuters reported, citing Dutch news agency ANP.

SPAIN AND PORTUGAL

* Spain's High Court is considering Switzerland's second extradition request against Herve Falciani, a French citizen who worked for HSBC, for leaking details of thousands of the bank's clients, Reuters reported.

* Novo Banco SA has started the sales process of 9,000 properties valued at €700 million. Three companies — Anchorage Capital Partners, Bain Capital Credit and Arrow Global — will present offers for the acquisition of the assets, according to Jornal de Negócios.

* The Portuguese central bank appointed You Zhang and Vasco Martins executive administrators of Haitong Bank SA, raising the number of the bank's administrators to seven, Dinheiro Vivo reported.

ITALY AND GREECE

* Net nonperforming loans at Italian banks fell to €40.13 billion in July, the lowest since December 2010, Reuters wrote, citing data from the Bank of Italy. Gross bad loans, meanwhile, dropped to €127.48 billion, the lowest since January 2013.

* Institutional investors at the upcoming Sept. 20 shareholders' meeting of Banca Carige SpA are expected to vote in favor of a board list presented by fund managers association Assogestioni, MF reported.

* Credito Valtellinese SpA agreed to the renewal of the board requested by shareholder Denis Dumont back in August, with the deadline by which to present the lists set for Sept. 17, MF wrote.

NORDIC COUNTRIES

* DNB ASA experienced technical disruptions to its online, mobile, ATM and stock trading platforms yesterday, Dagens Næringsliv wrote. The disruption to service platforms lasted around two hours. DNB's technical department has not yet identified the source of the problem.

EASTERN EUROPE

* Sergey Khotimskiy, a co-founder and controlling shareholder of PJSC Sovcombank, said the Russian lender is seeking to raise at least $300 million with a potential IPO in Moscow as early as April 2019, Bloomberg news reported. The potential offering could also boost the bank's equity by at least 20%, the news agency noted.

* Meanwhile, Japan's SBI Holdings Inc. became a co-investor in Sovcombank alongside the Russia-China Investment Fund.

* Russian state-owned lender Vnesheconombank said it will get a $1.7 billion loan from the China Development Bank, Reuters reported.

* Otkritie Financial Corp. Bank acquired 14.9% of shares in PJSC Rosgosstrakh Bank from minority shareholders, bringing the holding in the lender to 99.99%, Vedomosti said. Otkritie Bank spent 1.55 billion Russian rubles on the buyout.

* Igor Bulantsev, who serves as head of PAO Sberbank of Russia's investment unit Sberbank CIB, will leave the post by 2018-end due to the planned integration of the unit with Sberbank's corporate banking division, Kommersant reported.

* Alexander Nesterenko was appointed new acting chairman of the management board at Public Stock Co. Orient Express Bank, news agency RBK reported.

* Poland's Bank Gospodarstwa Krajowego has opened a representative office in Brussels. The bank also plans to open offices in Frankfurt and London, and is considering Paris and Singapore as potential locations.

* Kazakhstan's Tsesnabank JSC said its shareholders intend to increase the lender's capital by 40 billion tenge in the near future.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: Ping An Asset Management hikes ICBC stake; ClearView Wealth faces penalty

Middle East & Africa: Shareholders approve MedGulf's capital hike; CEO of Kenya's Family Bank to leave

Latin America: Bancomer starts employee dismissal program; BB Seguridade ups stake in Ciclic

North America: US banks win roles in potential Aramco-SABIC deal; NY watchdog OKs 2 stablecoins

Global Insurance: Florence insured loss could be $20B; AIG shops quota share; pricing seen stable

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Global trade tensions to put squeeze on smaller European trade finance banks: A looming supply chain disruption brought on by the escalating global trade tensions may soon see smaller European trade finance banks struggle to find new business as companies shift more funding to large-scale lenders.

Senior Managers Regime key to higher standards in business lending: UK regulator: Abuse of small businesses by banks such as in RBS' GRG and Lloyds' HBOS scandals should be prevented by new governance rules in place since 2016, Financial Conduct Authority CEO Andrew Bailey said.

Incoming storms will be a wake-up call, but will not turn reinsurance market: As Hurricane Florence bears down on the Carolinas and mid-Atlantic, and Tropical Storm Isaac aims for the Caribbean, reinsurers and brokers are not expecting losses to push up reinsurance prices, although they may prevent further softening.

Sheryl Obejera, Ed Meza, Danielle Rossingh, Gerard O'Dwyer, Beata Fojcik, Yael Schrage, Stephanie Salti, Praxilla Trabattoni and Mariana Aldano contributed to this report.

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